INTM164160 - UK residents with foreign income or gains: dividends: Underlying tax: reserves
TIOPA10/S59 (8) provides that 바카라 사이트˜relevant profits바카라 사이트™ or 바카라 사이트˜profits available for distribution바카라 사이트™ are the company바카라 사이트™s accounts바카라 사이트™ profits making no provision for reserves, bad debts or contingencies other than such as is required to be made under the foreign country바카라 사이트™s law.
In practice, transfers to reserves for a future liability are allowed if they represent a proper deduction in computing commercial profits and there is a firm expectation that the liability will be incurred and they are directly related to the expected amount of the liability. Provisions which represent an appropriation of profit or which are made not on grounds of commercial necessity but for reasons of commercial prudence are regarded as available for distribution and included in relevant profits.
CTIAA Underlying Tax Group has considered a number of reserves commonly found in particular countries. Their proper treatment is shown in the Group바카라 사이트™s information leaflets, which are sent to companies when considering a dividend.