Finance Act, 1989
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Attribution of distributions to accounting periods. |
25.—(1) (a) Notwithstanding subsection (1A) of section 45 (as amended by this Act) of the Finance Act, 1980 , but subject to subsections (2) and (3) of this section, a company which makes a distribution on or after the 6th day of April, 1989, may, by notice in writing given to the inspector within 6 months of the end of the accounting period in which the distribution is made, specify the extent to which the distribution is to be treated, for the purposes of the said section 45, as made for any accounting period or periods. | |
(b) A part of a distribution treated under the provisions of paragraph (a) as made for an accounting period shall be treated for the purposes of subsections (1), (1A) and (2) of the said section 45 as a separate distribution. | ||
(2) A company may specify in accordance with subsection (1) that only so much of a distribution, or more than one distribution, made on any day is made— | ||
(a) for any accounting period, as does not exceed the undistributed income of the company for that accounting period on that day, and | ||
(b) for an accounting period or accounting periods ending more than 9 years before that day, as does not exceed the amount by which the amount of the distribution or the aggregate amount of the distributions, as the case may be, exceeds the aggregate of the undistributed income of the company on that day for accounting periods ending before, but not more than 9 years before, that day. | ||
(3) Except where a distribution made by a company is— | ||
(a) an interim dividend paid before the 6th day of April, 1990, by the directors of the company, pursuant to powers conferred upon them by the articles of association of the company, in respect of the profits of the accounting period in which it is paid, or | ||
(b) a distribution by virtue only of subparagraph (ii), (iii) (I) or (v) of section 84 (2) (d) of the Corporation Tax Act, 1976 , or | ||
(c) a distribution made in respect of shares of a type referred to in paragraph (c) of the definition of “preference shares” in subsection (1) of section 42 (as amended by this Act) of the Finance Act, 1984 , or | ||
(d) made in an accounting period in which the company ceases or commences to be within the charge to corporation tax, | ||
the company shall not be entitled to specify in accordance with subsection (1) that the distribution is to be treated as made for the accounting period in which it is made. | ||
(4) For the purposes of this section, the amount of the undistributed income of a company for an accounting period on any day shall be the amount of the distributable income of the company for the accounting period, as determined by subsection (1B) of section 45 (as amended by this Act) of the Finance Act, 1980 , reduced by the amount of each distribution, or part thereof, made before that day and on or after the 6th day of April, 1989, which is to be treated, whether under the said section 45 or this section, as made for that accounting period. |