Get your ACT together

Article Abstract:

The Income and Corporation Taxes Act of 1988 requires UK-based businesses to account for advance corporate tax (ACT) upon payment of dividends to shareholders. Knowing how to deal with the ACT can help firms improve their cash flow. For instance, companies can reduce their tax liability by offsetting the ACT from the net dividends paid within a certain accounting period against the tax liability for the same period. Subsidiaries need not account for ACT, /s 247(1)(2)/, even if pay dividends up to their parent company, provided that they are considered as part of a valid group income election. Companies can also make a carry back claim so that its surplus ACT can be offset against their tax liabilities on the firms' total profits for accounting periods starting in the last six years. Other information that may be used to managed the ACT are discussed.

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ACT 2, strategies and traps

Article Abstract:

Effective management of the advance corporation tax (ACT) can provide numerous benefits to business organizations. For instance, avoiding surplus ACT generation can save firms from writing the tax off in the accounts, thereby leaving their reported earnings unaffacted. Companies with the surplus ACT problem may best deal with it by obtaining franked investment income (FII) or buying a firm with surplus FII. Other corporations try to minimize their surplus problems by opting for the stock dividend option. The ACT can also be used to maximize a company's cash flow advantage, usually done by the proper scheduling of dividend and ACT payments. Other ways by which the ACT may used to the company's advantage are offered.

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Tax planning for a Labour budget

Article Abstract:

A Labour Party victory in the Apr 1992 elections would result in significant changes in UK tax laws as the Labour Party has made it known that it is committed to raising some forms of taxes. It would therefore be advisable to take into account the impact of these planned changes in tax policy when formulating tax planning strategies. This would help minimize the impact of tax changes should a Labour-controlled government come to power. The Labour Party's key tax proposals are the return to a system of graduated income tax rates, the provision of additional tax relief to encourage business investment, the reduction of exemptions from capital gains tax, and the review of inheritance tax laws.

Political organizations, Labour Party (United Kingdom), Tax policy

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