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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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ACT: set-off against CT on profits: carry-forward surplus ACT

ICTA88/S239 (4)

The surplus ACT for any accounting period less any amount:

  • used in a Section 239 (3) claim, or
  • set off or repaid under the FID provisions,

was carried forward and dealt with for the purposes of Section 239 (but not for the purposes of ICTA88/S240) as if it were ACT paid by the company in respect of distributions made in the next accounting period.

This rule was subject to ICTA88/S240 (5), ICTA88/S245, S245A and 245B (changes in ownership).

The company could therefore carry forward ACT under Section 239 (4). If there was a surplus of ACT in the later period, the company could then carry it back again under ICTA88/S239 (3) subject to the time limit.

Such treatment may have benefited a company if the two-year time limit for making a Section 239 (3) claim in respect of the earlier accounting period had expired.

Any balance carried forward, if unrelieved, was then automatically carried forward to the next subsequent accounting period.