ACT: tax credit & FA93: background
Prior to 6 April 1999, when a UK resident company made a qualifying distribution it had to account for ACT (ICTA88/S14 (1)). A UK resident recipient of a qualifying distribution other than a FID was entitled to a tax credit (ICTA88/S231 (1)).
Prior to FA93, the rate of ACT was linked to the basic rate of IT (ICTA88/S14 (3)), while the rate of tax credit was equal to the rate of ACT (ICTA88/S231 (1)). As a result the rate of tax credit equalled the basic rate of IT.
So a UK resident recipient of a qualifying distribution received a tax credit that matched the basic rate IT liability on the qualifying distribution.