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HMRC internal manual

International Manual

Controlled Foreign Companies: exemptions - Acceptable Distribution Policy ('ADP'): Time limit for payment of dividend

The ADP exemption was abolished in FA09 for accounting periods of CFCs beginning on or after 1 July 2009. This guidance only applies to APs ending on or before 30 June 2009


To comply with the terms of the acceptable distribution policy a dividend has to be paid to United Kingdom residents within 18 months of the end of the period for which it is to satisfy an acceptable distribution policy or within such longer period as the Commissioners of Revenue & Customs may allow in a particular case. Requests for an extension of the time limit should be made to the local inspector. An extension to the 18 month time limit will normally only be agreed if there are exceptional reasons for the delay. An extension will normally be agreed where there has been an enquiry into a company’s return and additional distributions would be required to meet the 90% standard as a result of an amendment to chargeable profits, provided there has been no delay, neglect or fraud on the part of the taxpayer in either agreeing the adjustment or making the distribution. Special rules apply where the controlled foreign company is carrying on general insurance business using non-annual accounting - see INTM256350.