ACT stands for both Association of Corporate Treasurers and Advance Corporation Tax in the realm of accounting, each holding significant importance in different contexts.
Advance Corporation Tax (ACT) was a system used in the United Kingdom where corporations made advance payments on their corporation tax liabilities when distributions, such as dividends, were made. ACT was abolished on April 6, 1999.
The gross dividend refers to the total amount a company distributes to its shareholders before any withholding taxes or other deductions.
Mainstream Corporation Tax (MCT) was formerly a key component of the corporation tax system in the UK, calculating a company's tax liability for an accounting period after the offsetting of Advance Corporation Tax (ACT), which was abolished in 1999.
Shadow Advance Corporation Tax (Shadow ACT) refers to the system that applied to any unrelieved surplus Advance Corporation Tax (ACT) on 6 April 1999, when ACT was abolished. It preserved the right to carry forward surplus ACT without reducing the corporation tax liability for periods after 6 April 1999.
Surplus Advance Corporation Tax (ACT) refers to the excess amount of advance corporation tax paid within an accounting period that surpassed the maximum amount allowable for set-off against gross corporation tax. This taxation mechanism was abolished effective 1 April 1999.
