Taxation in the United Kingdom/Legislation/Section 13AB of the Income and Corporation Taxes Act 1988

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This Section introduces the non-corporate distribution rate.

The Section (and, indeed, all the non-corporate distribution rate provisions) apply to any accounting period in which the company makes one or more non-corporate distributions and the company's underlying rate of corporation tax is lower than the non-corporate distribution rate.

Where this Section applies, the company is taxed at the non-corporate distribution rate on an amount of its profits chargeable to corporation tax that are matched with a non-corporate distribution, and at the company's underlying rate on any remaining profits.

The non-corporate distribution rate is such rate as Parliament may from time to time determine.

This Section also introduces Schedule A2 to ICTA, which contains the detailed rules for the non-corporate distribution régime, and also definitions of terms such as "underlying rate" and "non-corporate distribution".