Are dividends chargable or not?

Let me try and remove the confusion:

Dividend income is exempt from corporation tax and is NOT included in deriving Taxable Total Profit (TTP) – the figure we charge to CT.

In determining whether a company is large and therefore may have to pay its CT by quarterly instalments we must compare the company’s “profits” (TTP + Dividends received” with the annual “profits” limit of £1.5M.

You however state “In chapter 16 on corporation tax, section 1.2 illustration 2 it mentions that a company is liable for corporate tax if TTP+Dividends exceed GBP1.5M.”

The note does not say this, it says

“A company usually has to pay its CT liability 9 months and 1 day after the end of its CAP, but large companies are required to make quarterly instalment payments to settle their corporation tax liability.
A large company is a company whose “profits” exceed £1.5M. “Profits” are defined as the TTP of the company plus dividends received (excluding dividends from related 51% group companies).”

The notes before this identify that a company pays CT on its TTP and section 2 shows a proforma CT computation showing the calculation of TTP with note 2.1 stating as you rightly say that dividends are indeed exempt.

The figure of “profits” is usually called “augmented profits” but the ACCA simply refer to “profits”.

Hope this resolves your problem.

Correct