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HMRC internal manual

Company Taxation Manual

Shadow ACT: set-off of ACT: accounting periods beginning on or after 6 April 1999

FA98/S32, SI1999/358

No ACT is payable in respect of any distribution made on or after 6 April 1999.

No surplus ACT can be carried forward from an accounting period beginning before that date and be treated as if it were ACT paid in respect of distributions made by the company in the next accounting period.

There is therefore no amount to be set off under ICTA88/S239 (2). In any case, Section 239 ceases to have effect for accounting periods beginning on or after 6 April 1999.

Relief for any amount of ACT that is available for set off but has not been set off against the liability of an accounting period beginning before 6 April 1999 (‘unrelieved surplus ACT’) can only be obtained under the Corporation Tax (Treatment of unrelieved surplus Advance Corporation Tax) Regulations 1999.

For the purposes only of these regulations, an accounting period straddling 6 April 1999 is treated as two accounting periods, one ending on 5 April 1999 and the other beginning on 6 April 1999. Thus, where the true accounting period straddles 6 April 1999, the first accounting period to which the regulations apply and against the liability for which ‘unrelieved surplus ACT’ may be set off is the notional accounting period deemed to begin on 6 April 1999.