© Crown copyright 1989
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This publication is available at https://www.gov.uk/government/publications/statement-of-practice-7-1989/statement-of-practice-7-1989
Advance Corporation Tax (ACT) was abolished from 6 April 1999 onwards. Prior to 6 April 1999, Taxes Act (TA) 1988 section 240 provides that a company may surrender to a 51% subsidiary the benefit of ACT on dividends. The time limit for claims to surrender is 6 years from the end of the accounting period in which the dividend was paid. A company can claim to surrender ACT whether or not it is surplus to the amount which under the rules in TA 1988 section 239 can be set against the Corporation Tax charged on its own profits for that accounting period.
The Commissioners for HM Revenue and Customs (HMRC) had taken the view that if ACT had already been set against the tax payable on an assessment which had become final, that ACT could not subsequently be surrendered. Following a decision on an appeal to the Special Commissioners the Commissioners for HMRC have been advised that the determination of an assessment does not preclude the subsequent surrender of ACT set off in the assessment. This practice is applied to all claims for surrender made on or after 12 October 1989 and to existing claims which were not settled at 12 October 1989.
Note: this statement is as it appears in HMRC’s Statements of Practice (March 2009).