CT600 Box 400: Franked Investment Income Explained
CT600 Box 400 is part of the tax calculation grid on your company tax return. It reports franked investment income (FII) — dividends received from other UK companies that are chargeable to corporation tax. For the vast majority of small and micro-entity companies, Box 400 will be zero. This guide explains what it is, when it applies, and why most directors can safely leave it blank.
What Is CT600 Box 400?
Box 400 sits within Section 11 of the CT600 — the "Calculation of Tax Outstanding or Overpaid" section. It forms Row 5 of the tax calculation grid, which breaks down your company's taxable profits by income type so HMRC can apply the correct tax rate to each category.
The tax calculation grid spans several boxes:
| Box | Description |
|---|---|
| Box 335 / 350 | Trading profits — Financial Year 1 and Financial Year 2 |
| Box 365 / 385 | Non-trading loan relationship profits |
| Box 400 | Franked investment income |
| Box 415 | Other profits |
What Is Franked Investment Income?
Franked investment income (FII) refers to dividends received from other UK companies — income that has already had UK corporation tax paid on the profits from which it was distributed. The word "franked" historically meant the dividend came with evidence that UK tax had already been paid at source.
The term originates from the Advance Corporation Tax (ACT) regime, which operated from 1973 until its abolition in April 1999. Under ACT, when a company paid a dividend to shareholders, it simultaneously paid a proportion of that dividend to HMRC as an advance instalment of its corporation tax liability. This prepayment was called ACT, and the dividend was described as "franked" because it carried proof that tax had been settled.
When ACT was abolished, the FII concept was retained within the CT600 structure — but its practical relevance diminished significantly for most companies.
Why Box 400 Is Zero for Most Small Companies
Under current UK tax rules, most dividends received by a UK company from another UK company are exempt from corporation tax under the dividend exemption rules (also known as the exempt distributions exemption).
The exemption applies in the vast majority of cases, including:
- Dividends received from UK subsidiaries or associated companies
- Distributions received from companies in which you hold a significant shareholding
- Most intra-group dividend payments between UK companies
For standard trading companies — consultants, freelancers, tradespeople, retailers, online sellers, property investors — Box 400 will almost certainly be zero, and you do not need to take any action.
When Does Box 400 Apply?
Box 400 becomes relevant in the rare cases where FII is genuinely chargeable to corporation tax. These include:
- Investment and holding companies with complex dividend structures where the dividend exemption does not apply in full, or applies only partially
- Anti-avoidance provisions — HMRC has targeted rules that can bring certain artificially structured dividend arrangements back into charge
- Specific transitional arrangements carried over from the pre-1999 ACT regime (now almost entirely historical and confined to very large or long-established groups)
Box 400 and the Tax Calculation Grid
If Box 400 does contain a figure, it is included alongside your other taxable profits and subjected to corporation tax at the applicable rate.
For accounting periods ending on or after 1 April 2023, the rates are:
- 19% — small profits rate, on profits up to £50,000
- 25% — main rate, on profits above £250,000
- Marginal relief — available for profits between £50,000 and £250,000, tapering the effective rate between 19% and 25%
How Box 400 Relates to Box 315
Box 315 on the CT600 shows your Net Chargeable Profits — the total figure on which corporation tax is calculated, after all deductions, reliefs, and loss offsets have been applied.
If Box 400 contains a figure, that FII forms part of the total that feeds into Box 315. Dividends covered by the exemption are excluded from Box 315 entirely — they simply do not flow through the return. For a detailed explanation of how net chargeable profits are computed, see the CT600 Box 315 guide.
Box 400 and Box 620
Box 620 on the CT600 captures the gross amount of franked investment income received during the period. Box 400 and Box 620 are linked: the figure in Box 620 feeds into Box 400 in the tax calculation grid.
For companies where FII is chargeable, both boxes must be completed consistently and the figures must reconcile with the profit and loss account. CT600 preparation software handles this automatically, drawing the figures directly from the accounts data you supply.
Common Questions About Box 400
My company received dividends from a UK subsidiary — do I need to fill in Box 400?
Almost certainly not. Dividends from UK subsidiaries are generally covered by the dividend exemption and are not chargeable to corporation tax. Box 400 should remain zero.
Can I leave Box 400 blank on my return?
Yes. If no chargeable FII exists, Box 400 can be left blank or set to zero. There is no requirement to complete it for companies with no FII.
I operate a holding company and receive significant dividend income — what should I do?
Holding companies with complex multi-level dividend structures should seek professional advice. The dividend exemption rules can be intricate in holding company scenarios, and the specific facts of your structure will determine whether Box 400 applies.
Does CT600 software calculate Box 400 automatically?
Yes. Good CT600 preparation software calculates Box 400 automatically based on your company type and the income recorded in your accounts. For standard trading and property companies, it will be zero. For investment holding companies where FII is chargeable, the software draws the figure from your dividend income data.
Summary
CT600 Box 400 captures franked investment income — dividends from other UK companies that are genuinely chargeable to corporation tax. Thanks to the dividend exemption, this box is zero for the vast majority of small and owner-managed companies. Unless you operate a complex investment holding structure or have received specific advice to the contrary, Box 400 on your company tax return will be zero.
For a complete overview of the CT600 form and how each section fits together, see the CT600 boxes explained guide.