imputation system

Definitions

Accounting

  • noun a former system of taxation of dividends, where the company paid advance corporation Tax on the dividends it paid to its shareholders, and the shareholders paid no tax on the dividends received, assuming that they paid tax at the standard rate

Economics

  • noun a system of taxation of dividends, in which the company pays advance corporation tax on the dividends it pays to its shareholders, and the shareholders pay no tax on the dividends received, assuming that they pay tax at the standard rate (the ACT is shown as a tax credit which is imputed to the shareholder). The imputation system is used in the UK, Ireland, Australia and other countries.
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