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HMRC internal manual

Company Taxation Manual

Shadow ACT: unrelieved surplus: set-off

The amount of unrelieved surplus ACT to be set against the company’s liability to CT for any accounting period beginning on or after 6 April 1999 is the lesser of:

  • the amount of unrelieved surplus ACT to the extent that it cannot be set against the liabilities for an earlier accounting period, including any controlled foreign companies liabilities, and
  • the amount of the company’s capacity calculated in accordance with Regulation 11, less the amount of any shadow ACT allocated to that period in accordance with Regulations 12 and 13.

Where section ICTA88/S116 (2) applies (arrangements for transferring relief),unrelieved surplus ACT cannot be set against a company’s liability to CT on its share of partnership profits.