The Corporation Tax (Treatment of Unrelieved Surplus Advance Corporation Tax) Regulations 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)(1);

• “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)(2);

• “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 1988(3);

• “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)(4) as 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)(5) (controlled foreign companies).

(4) For the purposes only of these Regulations, a straddling accounting period shall be treated as if–

(a)it were composed of two accounting periods, the one ending on 5th April 1999 and the other beginning on 6th April 1999;

(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)an accounting period deemed by virtue of paragraph (4) of this regulation to begin on 6th April 1999, and

(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)on a time basis, or

(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.