Income and Corporation Taxes Act 1988

Receipt of franked investment income after payment of advance corporation tax U.K.

4 (1) This paragraph shall have effect where—

(a) a return has been made of franked payments made in any return period falling within an accounting period and advance corporation tax has been paid in respect of those payments; and

(b) the company receives franked investment income after the end of the return period but before the end of the accounting period.

(2) The company shall make a return under paragraph 1 above for the return period in which the franked investment income is received whether or not it has made any franked payments [F1 F2 . . . ] in that period, and, subject to sub-paragraph (3) below, shall be entitled to repayment of any advance corporation tax paid (and not repaid) in respect of franked payments made in the accounting period in question.

[F3 (3) The amount of the repayment—

(a) if no franked payments were made by the company in the return period for which a return is made by virtue of sub-paragraph (2) above, shall not exceed an amount equal to the advance corporation tax that would be payable in respect of a distribution equal to the difference between—

(i) the franked investment income received, and

(ii) the tax credit comprised in that franked investment income; and

(b) in any other case, shall not exceed an amount equal to the advance corporation tax that would be payable in respect of a distribution equal to the amount by which—

(i) the franked investment income received, exceeds

(ii) the franked payments made in the return period,

at the rate provided in paragraph 2(4A) above.]

Textual Amendments

F1 Words in Sch. 13 para. 4(2) inserted (with effect in accordance with Sch. 16 para. 3(13) of the amending Act) by Finance Act 1994 (c. 9), Sch. 16 para. 3(8)

F2 Words in Sch. 13 para. 4(2) repealed (with effect in accordance with Sch. 6 para. 16(13) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 6 para. 16(7), Sch. 8 Pt. 2(11), Note

F3 Sch. 13 para. 4(3) substituted (with effect in accordance with Sch. 4 para. 23(5) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 23(4)