Section OC 29 — Income Tax Act 2007: FDP credits and imputation credits attached to dividends

OC 29 FDP credits and imputation credits attached to dividends Attaching combined credits (1) When an FDPA company pays a dividend, it may attach both an FDP credit and an imputation credit to the dividend. Combined ratio (2) A dividend with combined credits attached has a combined imputation and FDP ratio calculated using the formula— combined credits attached net dividends. Definition of items in formula (3) In the formula in subsection (2),— (a) combined credits attached is the total amount of FDP credits and the imputation credits attached to the dividend: (b) net dividends is the amount of dividends paid, excluding the amount of FDP credits and the imputation credits. Maximum permitted ratio (4) A dividend with combined credits attached must not have a combined imputation and FDP ratio that is more than the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios). Breach of combined ratio breach (5) A breach of the maximum ratio referred to in subsection (4) gives rise to an excess credit amount that is calculated using the formula— net dividends × (combined ratio – maximum ratio). Definition of items in formula (6) In the formula in subsection (5),— (a) net dividends is the amount of dividends paid, excluding FDP credits and the imputation credits: (b) combined ratio is the combined imputation and FDP ratio of the dividend: (c) maximum ratio is the maximum combined imputation and FDP ratio permitted under subsection (4). Relationship with section OZ 8 (7) Section OZ 8 (Attaching imputation credits and FDP credits: maximum permitted ratio) may apply to modify this section. Defined in this Act: amount , basic rate , combined imputation and FDP ratio , company , dividend , excess credit amount , FDP credit , FDP ratio , FDPA company , imputation credit , income tax , income year , maximum permitted ratio , pay , tax year , Compare: 2004 No 35 s MG 10 Section OC 29(7) heading: added, on 1 April 2008, by section 504 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section OC 29(7): added, on 1 April 2008, by section 504 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).