Corporation Tax (Treatment of Unrelieved Surplus Advance Corporation Tax) Regulations 1999
| Jurisdiction | UK Non-devolved |
| Citation | SI 1999/358 |
| Year | 1999 |
1999 No. 358
INCOME TAX
The Corporation Tax (Treatment of Unrelieved Surplus Advance Corporation Tax) Regulations 1999
Made 15th February 1999
Laid before the House of Commons 16th February 1999
Coming into force 9th March 1999
The Treasury, in exercise of the powers conferred on them by section 32 of the Finance Act 19981, hereby make the following Regulations:
Citation and commencement
1. These Regulations may be cited as the Corporation Tax (Treatment of Unrelieved Surplus Advance Corporation Tax) Regulations 1999 and shall come into force on 9th March 1999.
Introductory
2.—(1) These Regulations make provision for and in connection with enabling unrelieved surplus ACT that a company has as at 6th April 1999 to be set against its liability to corporation tax on profits charged to corporation tax for an accounting period beginning on or after that date, other than an accounting period that is subsequent to the company’s final accounting period.
(2) In paragraph (1) the reference to unrelieved surplus ACT of a company includes, where the company is a member of a group at any time in an accounting period to which that paragraph applies, a reference to unrelieved surplus ACT that another company, which is a member of the same group at any time in that accounting period, has as at 6th April 1999.
Interpretation
3.—(1) In these Regulations unless the context otherwise requires–
“accounting period” shall be construed in accordance with regulation 2(1);
“ACT” means advance corporation tax;
“the Board” means the Commissioners of Inland Revenue;
“distribution” has the meaning given by section 832(1);
“final accounting period” shall be construed in accordance with regulations 4 and 5;
“franked distribution” means the sum of the amount or value of a relevant distribution and such proportion of that amount or value as corresponds to the rate of shadow ACT specified in regulation 11(9), and references in these Regulations to any accounting period in which a franked distribution is made are references to the accounting period in which the relevant distribution in question is made;
“franked investment income” means income of a company resident in the United Kingdom which consists of a distribution in respect of which the company is entitled to a tax credit (and which accordingly represents income equal to the aggregate of the amount or value of the distribution and the amount of that credit), except that it does not include income to which regulation 7, 8(4) or 9 refers, or income falling within regulation 10 to which paragraph (4) of that regulation does not apply;
“group” has the meaning given by regulation 6;
“notification” means notification in writing;
“parent company” in relation to a group shall be construed in accordance with regulation 6(1) to (7); and “immediate parent company” shall be construed in accordance with regulation 6(8);
“relevant distribution” means a distribution made on or after 6th April 1999;
“shadow ACT” means a notional amount of ACT treated as paid by a company in respect of a relevant distribution and computed in accordance with regulation 11;
“straddling accounting period” means an accounting period beginning before, and ending on or after, 6th April 1999, and includes a separate accounting period mentioned in sections 245(2), 245A(2) and 245B(2)2;
“surplus franked investment income”–
(a) as respects an accounting period beginning on or after 6th April 1999, has the meaning given by regulation 11(13);
(b) as respects an accounting period beginning before that date, has the meaning given by section 238(1A)3;
“surplus shadow ACT” means the excess amount of shadow ACT over the total amount of shadow ACT set against a company’s liability to corporation tax for an accounting period in accordance with regulation 12(1);
“the Taxes Act” means the Income and Corporation Taxes Act 19884;
“unrelieved surplus ACT” means the ACT (if any) which, apart from sub-paragraph (3) of paragraph 12 of Schedule 3 to the Finance Act 1998 but otherwise in accordance with that paragraph, would be treated by virtue of section 239(4)5as paid in respect of distributions made by a company in the first accounting period of the company to begin on or after 6th April 1999.
(2) References in these Regulations to the profits of a company charged to corporation tax for any accounting period are references to the amount of the company’s profits for that period on which corporation tax falls finally to be borne.
(3) References in these Regulations, however expressed, to a company’s liability to corporation tax for an accounting period include references to a company’s liability in respect of any sums chargeable on the company for that period under section 747(4)(a)6(controlled foreign companies).
(4) For the purposes only of these Regulations, a straddling accounting period shall be treated as if–
(a)
(a) it were composed of two accounting periods, the one ending on 5th April 1999 and the other beginning on 6th April 1999;
(b)
(b) there were apportioned to each of those accounting periods the proportionate part of the profits of the company charged to corporation tax for the straddling accounting period.
(5) References in these Regulations to an accounting period beginning on or after 6th April 1999 include references to–
(a)
(a) an accounting period deemed by virtue of paragraph (4) of this regulation to begin on 6th April 1999, and
(b)
(b) a separate accounting period referred to in regulations 16(2) and 17(2) that begins on or after that date.
(6) References in these Regulations, other than the reference in paragraph (4)(b) above, to a requirement for profits charged to corporation tax for an accounting period to be apportioned between two separate parts of that accounting period are references to a requirement for those profits to be apportioned either–
(a)
(a) on a time basis, or
(b)
(b) where that basis would be unjust and unreasonable, on such basis as would be just and reasonable.
(7) In these Regulations any reference to a particular provision, without more, is a reference to that provision of the Taxes Act.
Definition of final accounting period—company not a member of a group
4.—(1) For the purpose of regulation 2(1) and subject to paragraphs (3) to (5) of this regulation and to regulation 5(10), where a company is not a member of a group at any time in the relevant accounting period, the final accounting period of that company is the accounting period beginning in the period of twelve months immediately following the end of the relevant accounting period or, if there is more than one accounting period beginning in that period of twelve months, the latest accounting period beginning in that period.
(2) In paragraph (1) “the relevant accounting period” is the first accounting period of the company after which no amount of unrelieved surplus ACT is available to be set against the company’s liability to corporation tax in accordance with these Regulations.
(3) Paragraph (1) shall not apply where, at any time in the first of its accounting periods to begin on or after 6th April 1999, the company notifies an officer of the Board that it will not seek or, as the case may be, will cease to seek recovery of unrelieved surplus ACT in respect of that accounting period or any subsequent accounting period.
(4) Where, otherwise than in a case to which paragraph (3) applies, the company notifies an officer of the Board at any time in an accounting period that it wishes that accounting period to be its final accounting period and that it will not seek recovery of unrelieved surplus ACT in respect of any subsequent accounting period, the final accounting period of that company is, subject to paragraph (5), the accounting period in which the notification is made.
(5) Where–
(a)
(a) there is an amount of surplus shadow ACT in respect of an accounting period of the company beginning in the period of twelve months (“the relevant period”) immediately following the end of the accounting period in which the company notifies an officer of the Board as mentioned in paragraph (4) or, if there is more than one such accounting period, the latest accounting period beginning in the relevant period, and
(b)
(b) that amount or any part of it falls to be carried back in accordance with regulation 12(7) to the accounting period in which that notification is made,
the final accounting period shall be the accounting period or, as the case may be, the latest accounting period beginning in the relevant period from which an amount of surplus shadow ACT falls to be carried back as mentioned in sub-paragraph (b) of this paragraph, and not the accounting period in which the notification is made.
Definition of final accounting period—company a member of a group
5.—(1) For the purpose of regulation 2 and subject to paragraphs (3) to (10), where a company is a member of a group at any time in the relevant accounting period, the final accounting period of that company in its capacity as a member of that group is the accounting period beginning in the period of twelve months immediately following the end of the relevant accounting period or, if there is more than one accounting period beginning in that period of twelve months, the latest accounting period beginning in that period.
(2) In paragraph (1) “the relevant accounting period” is the first accounting period of the company after which no amount of unrelieved surplus ACT belonging to the company or any other company which is a member of the group at any time in that accounting period is available to be set against any liability to corporation tax in accordance with these Regulations; and for this purpose unrelieved surplus ACT belonging to another company that is a member of...
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