Pensions Review 1997: Finance (No 2) Act 1997

United Kingdom

Finance (No.2) Act 1997

  • Section 19 of the Finance (No.2) Act 1997 contains the changes made in the July Budget relating to advance corporation tax (ACT). The Chancellor removed the right of pension schemes to reclaim ACT on dividends paid by UK companies on or after 2 July 1997. Previously, when a dividend was paid to a pension scheme a tax credit of 20% of the gross dividend paid could be reclaimed.
  • If the pension scheme enjoys sovereign immunity under international law, or belongs to an overseas government or other international government, the ACT tax credit will continue to be available until 6 April 1999.