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 31st March 1999.

Easyform Glossary of Law Terms. — UK law terms.


advance corporation tax
a sum payable to the revenue when a company pays a dividend to its shareholders, abolished for distributions made after April 1999.

Collins dictionary of law. . 2001.


advance corporation tax
(ACT)
A tax which was abolished with effect from 6 April 1999. When a company (other than an international headquarters company in respect of a foreign income dividend) made a qualifying distribution prior to this date, it paid ACT to HM Revenue & Customs. The rate of ACT was fixed by reference to the lower rate of income tax. ACT was effectively a pre-payment of the company's corporation tax liability. A company with surplus ACT built up prior to 6 April 1999 may use the shadow ACT rules to recover the ACT paid in certain circumstances.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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