ABSTRACT
For the year of assessment 1998-99, an individual who receives a qualifying distribution from a company resident in the UK is liable to income tax under Schedule F. The individual is entitled to a tax credit equivalent to the ‘lower rate’ of income tax (for 1998-99, 20%) in addition to the net dividend. If the individual is not liable to higher rate of tax he will suffer no additional liability in respect of the dividend, and if his circumstances permit, he will be entitled to a repayment claim in respect of the credit. But if he is liable to a higher rate of tax he will be required to pay the difference between the higher rate of tax and the lower rate (for 1998-99, this amount is 20%).
