The main changes introduced with effect from 6 April 1993 were
The rate at which ACT was accounted for on a distribution made:
Income arising from distributions other than a FID was the sum
of a distribution and tax credit, and was referred to as dividend
income. Dividend income in the hands of a non-higher rate taxpayer
was liable to IT at the lower rate and not the basic rate. Where
the income was a FID, see
The tax credit carried by a distribution other than a FID was still equal to the ACT rate. However, for the purposes of computing the tax credit for 1993-94 the ACT rate was deemed to be 1/4 of the distribution (being 20% of the sum of the distribution and deemed ACT), although special rules applied in certain circumstances.