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HMRC internal manual

Company Taxation Manual

Shadow ACT: definition of a group

SI1999/358, Reg. 6

Groups with unrelieved surplus ACT that pay dividends could gain an advantage from attaching companies to the group that had the capacity to absorb shadow ACT. In the sameway, they would have an interest in detaching any that were expected to generate surplus shadow ACT. The rules seek to ensure that only companies that are economic members of the group are included and that they cannot be artificially detached, either temporarily or permanently.