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HMRC internal manual

Company Taxation Manual

Shadow ACT: accounting periods to which the Regulations apply: group members: unrelieved surplus ACT available for set off exhausted

The ‘relevant accounting period’ for a company that is a member of a group is the first accounting period of the company after which no amount of unrelieved surplus ACT belonging to it or any other company that is a member at any time in that accounting period is available for set off. For this purpose, any amount that is set against another company’s liability is regarded as available to the end of its accounting period. For example, a company makes up its accounts for the year to 31 December. The final amount of unrelieved surplus ACT is set against the liability of another group member for its accounting period ending on 31 March 2002. The company’s relevant accounting period will be that for the year ended 31 December 2002.

The ‘final accounting period’ for the group is the accounting period beginning in the period of twelve months immediately following the end of the relevant accounting period or, if there is more than one, the latest accounting period beginning in that period.

Where surplus shadow ACT is carried back and displaces unrelieved surplus ACT revealing that period as not being the ‘relevant accounting period’, the later accounting period is not the ‘final accounting period’ and the Regulations continue to apply.