A tax which was abolished with effect from 6 April 1999. When a company (other than an international headquarters company in respect of a foreign income dividend) made a qualifying distribution prior to this date, it paid ACT to HM Revenue & Customs. The rate of ACT was fixed by reference to the lower rate of income tax. ACT was effectively a pre-payment of the company’s corporation tax liability. A company with surplus ACT built up prior to 6 April 1999 may use the shadow ACT rules to recover the ACT paid in certain circumstances.

For more detail, see Practice note, Shadow ACT.