835X. Relief for certain distributions

(1) Where a distribution made in respect of an accounting period is made by a controlled foreign company out of chargeable income in respect of a previous accounting period, the corporation tax paid on the controlled foreign company charge attributable to that income shall be allowed as a credit against the tax chargeable in respect of the distribution.

(2) Where a distribution made in respect of an accounting period is made by a controlled foreign company in part out of chargeable income in respect of a previous accounting period and in part out of other income or profits, the distribution shall be treated as if it consisted of two distributions made out of chargeable income and out of other income or profits respectively, and subsection (1) shall apply to such part of the distribution as is made out of chargeable income as it applies to a distribution made wholly out of chargeable income.