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HMRC internal manual

Company Taxation Manual

Shadow ACT: accounting periods to which the Regulations apply: group members

The regime for companies that are members of a group is essentially the same as that for single companies except that the focus is on the group. An opt out made by the parent company of a group affects all the companies in that group. In the absence of an opt out, the Regulations will continue to apply to all the group members until none has any unrelieved surplus ACT available for set off.

A company may be a member of more than one group. Each group must be considered separately. A company could have no unrelieved surplus ACT but be a member of a group of which another member does. It could also be a member of another group of which none of the members has any unrelieved surplus ACT. The Regulations would apply to the company in its capacity as a member of the first group but not as a member of the second nor to any of the other members of the second group.
A company’s membership of each group is to be considered separately. Where a company is a member of two groups and the Regulations apply to both, any shadow ACT allocated to acompany in its capacity as a member of one group will affect its capacity to absorb shadow ACT generated in the other. The only other read across is where a company loses the right to set its unrelieved surplus ACT against its CT liability as a consequence of an opt out notification it made or one made by the parent company of a group of which it is or was a member. In such circumstances, its unrelieved surplus ACT is not available to it in its capacity as a member of any group or other group.