Finance Act 1972

1 (1) In subsection (3) of section 84 of the [1965 c. 25.] Finance Act 1965 for the words "the amount after deducting income tax borne by the company on franked investment income of the income tax deducted or deductible from the company's dividends " there shall be substituted the words " the amount of the advance corporation tax paid or payable in respect of the company's dividends ".

(2) In subsection (5) of that section for the words " the company by virtue of an election under section 48 of this Act pays any dividends without deduction of income tax " there shall be substituted the words " any of the dividends paid by the company are dividends to which section 84 of the Finance Act 1972 does not apply by virtue of an election under section 256 of the Income and Corporation Taxes Act 1970 " and for the words " if all the dividends so paid are paid without deduction of income tax " there shall be substituted the words " if all the dividends so paid are dividends to which the said section 84 does not so apply ".

(3) The expressions " unused credit for foreign tax " and " the current charge to corporation tax " (defined in subsection (8)(b) and (c) of the said section 84) shall be construed as if the rate of corporation tax for any relevant financial year were 40 per cent. and as if the law relating to corporation tax were the same as it was on 1st April 1972.

(4) For paragraph (d) of subsection (8) of that section there shall be substituted—

“(d) ' dividend' does not include a capital dividend or a dividend which is not a qualifying distribution, and in relation to any dividends ' advance corporation tax paid or payable ' includes advance corporation tax which would have been payable but for the dividends being group income, and for the purposes of this section there shall be disregarded any advance corporation tax which a company is treated as having paid by virtue of section 92 of the Finance Act 1972”.