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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Distributions: impact on Corporation Tax: introduction

A distribution by a company is inadmissible as a deduction in computing the company’s income (CTA09/S1305).

This rule applies to profits chargeable to CT as determined by CTA09/PART2.

Where the payment of a qualifying distribution by a UK branch of a non-resident company was made before 6 April 1999, it did not result in ACT being payable as ICTA88/S14 referred only to companies resident in the UK.

However, such a distribution did have tax consequences in being non-deductible in computing income.

For payments made before 6 April 1999

See CTM20060 regarding the treatment of franked payments.

See CTM21250 regarding the treatment of foreign income dividends (FIDs) paid.