Section 259ZMA | Circumstances in which Chapter applies ^F1F2

(1)This Chapter applies if conditions A to E are met.

(2)Condition A is that, for an accounting period (“the surplus period”), the dual inclusion income of a company (“company A”) exceeds its counteraction amount.In this Chapter, the amount of the excess is referred to as “the DII surplus”.

(3)Condition B is that, for an accounting period (“the shortfall period”), the counteraction amount of another company (“company B”) exceeds its dual inclusion income.In this Chapter, the amount of the excess is referred to as “the DII shortfall”.

(4)See section 259ZMF for the meanings of “dual inclusion income” and “counteraction amount”.

(5)Condition C is that there is a period (“the overlapping period”) that is common to both the surplus period and the shortfall period (and see subsections (8) and (9)).

(6)Condition D is that there is a time during the overlapping period when both company A and company B are within the charge to corporation tax.

(7)Condition E is that there is a time during the overlapping period when company A and company B are members of the same group of companies (see section 259ZME).

(8)Subsection (9) applies if, during any part of the overlapping period—

(a)either company A or company B is not within the charge to corporation tax, or

(b)company A and company B are not members of the same group of companies.

(9)That part is treated as not forming part of the overlapping period but instead as—

(a)forming part of the surplus period that is not included in the overlapping period, and

(b)forming part of the shortfall period that is not included in the overlapping period.