434 Distributions to be taken into account and meaning of “distributable income”, “investment income”, “estate income”, etc
(1) In this section –
“estate income” means income (other than yearly or other interest) chargeable to tax under Case III, IV or V of Schedule D, and arising from the ownership of land (including any interest in or right over land) or from the letting furnished of any building or part of a building;
“trading company” means any company which exists wholly or mainly for the purpose of carrying on a trade and any other company whose income does not consist wholly or mainly of investment or estate income.
(2) For the purposes of section 440,
(a) any dividends which are declared for or in respect of the accounting period and are paid or payable during the accounting period or within 18 months after the end of the accounting period, and
(b) all distributions, other than dividends, made in the accounting period.
(3) Where –
(a) a period of account for or in respect of which a company declares a dividend is not an accounting period,
(b) the dividend is paid or payable during the period of account or within 18 months after the end of the period of account, and
(c) part of the period of account falls within an accounting period,
then, the proportion of the amount of the dividend to be treated for the purposes of subsection (2) as being for or in respect of the accounting period shall be the same as the proportion which that part of the period of account bears to the whole of that period.
(4) of a company for an accounting period shall be the income for the accounting period, computed in accordance with the Corporation Tax Acts, exclusive of franked investment income, before deducting –
(a) any loss incurred in any trade or profession carried on by the company which is carried forward from an earlier, or carried back from a later, accounting period,
(b) any loss which if it were a profit would be chargeable to corporation tax on the company under Case III or IV of Schedule D and which is carried forward from an earlier accounting period or any expenses of management or any charges on income which are so carried forward, and
(c) any excess of deficiencies over surpluses which if such excess were an excess of surpluses over deficiencies would be chargeable to corporation tax on the company under Case V of Schedule D and which is carried forward from an earlier, or carried back from a later, accounting period,
and after deducting –
(d) any loss incurred in the accounting period in any trade or profession carried on by the company,
(e) any loss incurred in the accounting period which if it were a profit would be chargeable to corporation tax on the company under Case III or IV of Schedule D,
(f) any excess of deficiencies over surpluses which if such excess were an excess of surpluses over deficiencies would be chargeable to corporation tax on the company for the accounting period under Case V of Schedule D,
(6) The amount for part of an accounting period of any description of income referred to in this section shall be a proportionate part of the amount for the whole period.
(7) Where a company is subject to any restriction imposed by law as regards the making of distributions, regard shall be had to this restriction in determining the amount of income on which a surcharge shall be imposed under section 440.
Note to FA12 Amendment 14
The amendment is subject to 14 s129(3)–(5) which cannot be consolidated:
(3) Subject to subsections (4) and (5), this section takes effect on and from 1 January 2013.
(4) This section applies—
(a) in the case of a chargeable period (within the meaning of section 321(2) of the Taxes Consolidation Act 1997) which is an accounting period of a company, as respects chargeable periods that start on or after 1 January 2013, and
(b) in a case other than that referred to in paragraph (a), as respects the year of assessment 2013 and subsequent years of assessment.
(5) This section does not affect the application of the provisions of the Taxes Consolidation Act 1997, which are amended or deleted by this section, as respects chargeable periods prior to those referred to in subsection (4).
Corresponding UK Tax Provision
Formerly Schedule 19, Income and Corporation Taxes Act 1988. Repealed in 1989.
Sections referred to in text
section 3 [Interpretation of Income Tax Acts]
section 21A [Higher rate of corporation tax]
section 83 [Expenses of management of investment companies]
section 129 [Irish resident company distributions not generally chargeable to corporation tax]
section 140 [Distributions out of profits or gains from stallion fees, stud, greyhound services fees and occupation of certain woodlands]
section 141 [Distributions out of income from patent royalties]
section 142 [Distributions out of profits of certain mines]
section 243 [Allowance of charges on income]
section 243A [Restriction of relevant charges on income]
section 440 [Surcharge on undistributed investment and estate income]
section 441 [Surcharge on undistributed income of service companies]
section 626B [Exemption from tax in the case of gains on certain disposals of shares]
441 Surcharge on undistributed income of service companies
705B Conditions for notice under section 705E