 The ACT rate was cut to 20% from April 1994.In 1997, the tax credit was scrapped for non-taxpayers (except charities and PEPs), which had a particular impact on pension funds, which could no longer claim a refund for any amount that had previously been paid as ACT.The effect of the change was that pension funds became effectively taxed on dividend income by way of the now non-refundable ACT, thus lowering pension returns and allegedly resulting in the winding up of some pension funds.