Taxes Consolidation Act 1997 section 162

Calculation of advance corporation tax where company receives distributions

Section 162 set out the mechanism for calculating advance corporation tax (ACT) where a company both received and made distributions in the same accounting period, allowing tax credits on distributions received to be offset against ACT otherwise payable.

• The section was deleted by section 41 of the Finance Act 2003 for accounting periods ending on or after 6 February 2003, following the abolition of ACT.
• ACT was payable only on the net excess of tax credits on distributions made by the company over tax credits on distributions received by it in the same period.
• Any unused excess of tax credits on distributions received was carried forward and treated as a tax credit on a distribution received in the next accounting period.
• An inspector could make assessments, adjustments or set-offs to correct any excessive amount carried forward, so that the ACT (and interest on unpaid tax) ultimately paid reflected the correct position.