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Allowance of United Kingdom corporation tax as a credit against income tax.
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357.—(1) In this section and Schedule 7—
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“company” means any body corporate;
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“corporation tax” means the tax in Northern Ireland and Great Britain known as corporation tax;
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“profits” in relation to income tax means income.
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(2) Subject to the provisions of Schedule 7, corporation tax payable in respect of profits arising in Northern Ireland or Great Britain shall, to the extent to which it is to be taken into account for the purposes of this section, be allowed as a credit against the income tax chargeable for any year of assessment by reference to those profits.
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(3) Where a dividend is paid by a company resident in Northern Ireland or Great Britain to a company which beneficially owns, directly or indirectly, not less than three-quarters of the ordinary share capital of the former company, the credit shall take into account the corporation tax payable by the former company in respect of its profits.
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(4) The corporation tax payable in respect of any profits shall be taken into account for the purposes of this section—
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(a) where the profits are subject to corporation profits tax, only to the extent that it cannot, on due claim having been made in that behalf, be allowed as a credit against corporation profits tax, or
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(b) where the profits are not subject to corporation profits tax, only to the extent that it could not, on due claim having been made in that behalf, have been allowed as a credit against corporation profits tax if the profits had been subject to that tax as profits of a company incorporated by or under the laws of the State.
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(5) In a case in which relief is allowed under this section, section 363 (3) shall have effect in relation to a dividend paid before the passing of the Finance Act, 1966, as it has effect in relation to a dividend paid before the making by the Government of an order to which section 361 (1) relates.
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