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CTM18720 | Shadow ACT: unrelieved surplus: set-off

From HM Revenue & Customs · Company Taxation Manual

SI1999/358 reg14

The amount of unrelieved surplus ACT to be set against the company's liability to CT for any accounting period (AP) beginning on or after 6 April 1999 is the lesser of:

  • the amount of unrelieved surplus ACT to the extent that it cannot be set against the liabilities for an earlier AP, including any controlled foreign companies liabilities, and

  • the amount of the company's capacity calculated in accordance with reg11, less the amount of any shadow ACT allocated to that period in accordance with reg12 and reg13.

Where section ICTA88/S116 (2) applies (partnerships involving companies - arrangements for transferring relief), unrelieved surplus ACT cannot be set against a company's liability to CT on its share of partnership profits.