Advanced Corporation Tax


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Advanced Corporation Tax

In the United Kingdom, the tax on a dividend that a corporation pays before distributing the dividend to shareholders. That is, the corporation pre-pays the advanced corporation tax so the shareholder does not have to do so when it comes time to pay his/her other taxes. The tax reduces the corporate tax the company must pay on its profits. It was introduced in 1973.
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Despite initial confusion, analysts say the new stock is just a vehicle for Laporte to pay its dividend to shareholders in the most tax-efficient manner after the abolition of Advanced Corporation Tax in April.
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But he did say that hurdles in the way of a possible demerger have been overcome, with the abolition of Advanced Corporation Tax in Britain, and a re-arrangement of the group's borrowings.
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Someone relying on equity dividends will suffer a reduced return because of falling advanced corporation tax credits on dividend income, even if held in a Pep or Isa.
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