Section 259ZMC | The unused part of the DII surplus F1F2
From legislation.gov.uk
10 June 2021
(1)This section identifies the unused part of the DII surplus of company A for the overlapping period, for the purposes of an allocation claim made by company B (“the current allocation claim”).F1F2
(2)The unused part of the DII surplus of company A for the overlapping period is the amount equal to—F1F2
(a)the DII surplus for the overlapping period (see subsection (3)), lessF1F2
(b)the amount of prior allocations for that period (see subsections (4) to (7)).F1F2
(3)To determine the DII surplus for the overlapping period—F1F2
(a)take the proportion of the surplus period included in the overlapping period, andF1F2
(b)apply that proportion to the DII surplus for the surplus period.F1F2
The DII surplus for the overlapping period is the amount given as a result of paragraph (b).
(4)To determine the amount of prior allocations for the overlapping period—F1F2
(a)identify any prior allocation claims for the purposes of this section (see subsection (5)), andF1F2
(b)take the steps set out in subsection (6) in relation to each such claim.F1F2
The amount of prior allocations for the overlapping period is the total of the previously used amounts given at Step 3 in subsection (6) for all the prior allocation claims.
(5)An allocation claim is a prior allocation claim for the purposes of this section if—F1F2
(a)it is an allocation claim made by a company in respect of all or part of the DII surplus of company A for the surplus period,F1F2
(b)it is made before the current allocation claim, andF1F2
(c)it has not been withdrawn.F1F2
(6)These are the steps referred to in subsection (4)(b) to be taken in relation to each prior allocation claim.F1F2
Step 1 Identify the overlapping period for the prior allocation claim.
Step 2 Identify any period that is common to the overlapping period for the current allocation claim and the overlapping period for the prior allocation claim. If there is a common period, go to Step 3. If there is no common period, there is no previously allocated amount in relation to the prior allocation claim (and ignore Step 3).
Step 3 Determine the previously allocated amount of the DII surplus in relation to the prior allocation claim (see subsection (7)).
(7)To determine the previously allocated amount of the DII surplus in relation to the prior allocation claim—F1F2
(a)take the proportion of the overlapping period for the prior allocation claim that is included in the common period identified at Step 2 in subsection (6) in relation to that claim, andF1F2
(b)apply that proportion to the amount of the DII surplus allocated on the prior allocation claim.F1F2
The previously allocated amount of the DII surplus in relation to the prior allocation claim is the amount given as a result of paragraph (b).
(8)If two or more allocation claims are made at the same time, for the purposes of this section treat the claims as made—F1F2
(a)in such order as the companies making them may jointly elect, orF1F2
(b)if no such election is made, in such order as an officer of Revenue and Customs may direct.F1F2
(9)For the purposes of Step 3 in subsection (6), the amount of the DII surplus allocated on a prior allocation claim is determined on the basis that an amount is allocated on the claim before it is allocated on a later claim.F1F2
(10)If the use of the proportion mentioned in subsection (3) or (7) would, in the circumstances of a particular case, produce a result that is unjust or unreasonable, the proportion is to be modified so far as necessary to produce a result that is just and reasonable.F1F2