Advance Corporation Tax - ACT

Advance Corporation Tax - ACT
The prepayment of corporate taxes by companies in the United Kingdom that distributed dividend payments to shareholders. The tax, which was introduced in 1973, was abolished in 1999 by then Prime Minister Gordon Brown; however, a 10% tax relief on didvidend income remained.

The advance corporation tax was paid before a company’s main corporation taxes, when dividend payments were made to shareholders. The amount paid in ACT was deducted from the main corporation taxes. A company’s ACT payments meant that those receiving dividends had already paid a basic rate tax on any dividend income. For the company, the amount paid in ACT could be factored in its profit and loss statements, thereby potentially reducing its corporate tax burden.


Investment dictionary. . 2012.

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  • Advance corporation tax — (ACT) was the scheme under which companies made an advance payment of corporation tax when they distributed dividend payments to shareholders. This payment was then offset against the company s final corporation tax bill. Certain recipients, such …   Wikipedia

  • advance corporation tax — When a company paid a dividend it also paid a percentage of the amount of the distribution to the Inland Revenue as ACT. The company could then set off the amount of ACT against its liability to mainstream corporation tax. ACT was abolished on… …   Law dictionary

  • advance corporation tax — ACT Formerly, an advance payment of corporation tax, payable when a company made a qualifying distribution ACT paid in an accounting period could be set against the gross corporation tax due for the period. ACT was abolished in 1999. Larger… …   Big dictionary of business and management

  • shadow advance corporation tax — A system applying to any unrelieved surplus advance corporation tax (ACT) on 6 April 1999, when ACT was abolished. It preserved the right to carry forward surplus ACT but did not result in any reduction in the corporation tax liability for… …   Accounting dictionary

  • recoverable advance corporation tax — Formerly, advance corporation tax (ACT) that could be set off in full against the current year s gross corporation tax liability or set back against gross corporation tax for accounting periods beginning six years preceding the current accounting …   Accounting dictionary

  • advance corporation tax — ACT Formerly, an advance payment of corporation tax payable when a company made a qualifying distribution. ACT was abolished on 6 April 1999, although rules exist to permit the recovery of payments prior to this date. Larger companies must now… …   Accounting dictionary

  • advance corporation tax — Also known as ACT. Dresdner Kleinwort Wasserstein financial glossary corporation tax liabilities are normally payable nine months after the end of the chargeable accounting period to which they relate. However, where a company pays a dividend (… …   Financial and business terms

  • Advance Corporation Tax — /ədˌvɑ:ns ˌkɔ:pə reɪʃ(ə)n tæks/ noun a tax (abolished in 1999) which was paid by a company in advance of its main corporation tax payments. It was paid when dividends were paid to shareholders and was deducted from the main tax payment when that… …   Dictionary of banking and finance

  • United Kingdom corporation tax — Throughout this article, the unqualified term pound and the £ symbol refer to the United Kingdom pound. Taxation in the United Kingdom This article is part of the series: Politics and government of the United Kingdom Central government …   Wikipedia

  • act — 1 n 1 a: something done by a person in accordance with his or her free will a tortious act see also actus reus b: the failure to do something that one has a legal duty to do – called also negative act; 2 a …   Law dictionary

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