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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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ACT: FID: international headquarters companies (IHC): introduction


Some foreign owned companies which exist to co-ordinate activities carried on in more than one country may have been put off locating in the UK if they had had to pay ACT in respect of any FID paid, even if the ACT was ultimately repayable.

To encourage such companies to locate in the UK, they did not have to pay ACT in respect of an FID. This benefit was targeted at what we termed IHC.

After the end of the accounting period there was a reckoning between the company and the Revenue to put the company in the position it would have been in had it accounted for ACT and then received repayment. If the repayment had been less than the ACT due on the FID, the company would pay the difference.