Taxation (International and Other Provisions) Act 2010 section 62

Meaning of "relevant profits" in section 61

Section 62 defines "relevant profits" for the purpose of calculating underlying tax credit on dividends received from overseas companies, depending on whether the dividend relates to a specified period, specified profits, or neither.

• If a dividend is paid for a specified period, the relevant profits are the profits of that period, topped up with distributable profits from earlier periods if the total dividend exceeds the distributable profits of that period.
• If a dividend is not paid for a specified period but is paid out of specified profits, the relevant profits are simply those specified profits.
• If the dividend is paid neither for a specified period nor out of specified profits, the relevant profits are based on the last accounting period ending before the dividend became payable, again topped up from earlier periods if needed.
• When drawing on earlier periods' distributable profits, the most recent period is used first, and profits already distributed or already treated as relevant profits for these purposes are excluded.