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HMRC internal manual

International Manual

UK residents with foreign income or gains: dividends: Dividends received by UK companies on or after 2 December 2004 - the ADP mixer cap

This legislation was repealed in relation to accounting periods of controlled foreign companies beginning on or after 1 July 2009.

ICTA88/S801(2A) applied the mixer cap to dividends received by UK companies on or after 31 March 2001 (INTM164220). FA05/S89 introduced an additional clause to ICTA88/S801(2A) applying ICTA88/S801(2B) where the relevant dividend is an ADP dividend of a CFC. ICTA88/S801(2B) introduced in the place of the 2001 mixer cap a new formula to be used, the ADP mixer cap.

The formula is D/1 - X x X where:

D is the amount of the dividend 

X is the maximum relievable rate, expressed as a decimal fraction

The maximum relievable rate is the rate of corporation tax in force when the dividend was paid.

The ADP mixer cap is substituted for the mixer cap in ICTA88S799(1A) and as a result there are no other amendments to the subsequent calculations.