»Ê¹ÚÌåÓýapp

»Ê¹ÚÌåÓýapp amount of tax credit to which a UK resident recipient of a qualifying distribution other than a FID was entitled remained an amount equal to the rate of ACT applied to the distribution.

»Ê¹ÚÌåÓýappre was an exception. Where the rate of ACT was calculated at the rate fixed for financial year 1993 of 9/31, the amount of tax credit was calculated as if the ACT rate had instead been 1/4, (FA93/S78 (3)).

This rule would have given an unsatisfactory result if a company received a dividend and then paid an equivalent dividend. »Ê¹ÚÌåÓýapp tax credit at 1/4, with an ACT rate of 9/31, would have resulted in the franked investment income being less than the franked payment.

To ensure that a dividend could pass through a company without a further liability to ACT arising, this rule was not applied for calculating franked investment income for 1993-94 so that the tax credit was calculated at the rate of 9/31 (FA93/S78 (4)(a).

However, this disapplication of the rule would have meant that if a company made a ICTA88/S242 or ICTA88/S243 claim to set losses etc against franked investment income of 1993- 94 in order to obtain payment of the tax credit (CTM16200), it would have received payment of tax credit at more than the desired rate of 1/4. So when a tax credit comprised in franked investment income of 1993-94 was paid to a company, the tax credit was recalculated at the rate of 1/4 for the purposes of payment to the company, (FA93/S78 (4)(b)).