INTM254650 - Controlled Foreign Companies: exemptions - Acceptable Distribution Policy ('ADP'): Definition of net chargeable profits
»Ê¹ÚÌåÓýapp 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
ICTA88/SCH25/PARA3(4A)
»Ê¹ÚÌåÓýapp net chargeable profits are the chargeable profits for the period less the company’s unrestricted creditable tax. See INTM209020 for further discussion of chargeable profits. »Ê¹ÚÌåÓýapp unrestricted creditable tax is the creditable tax that would be due if an apportionment were due for that period (INTM255850) but without applying the restriction in ICTA88/S797 which limits creditable tax to the corporation tax due on the chargeable profits.
»Ê¹ÚÌåÓýapp effect of allowing unrestricted creditable tax is that, in computing the creditable tax, no grossing up of dividends for underlying tax or withholding tax is required. »Ê¹ÚÌåÓýapp tax shown as paid in the controlled foreign company’s accounts can be accepted as a proper deduction in arriving at net chargeable profits.