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HMRC internal manual

Company Taxation Manual

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HM Revenue & Customs
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ACT: FID: international headquarters companies (IHC): further reckoning following additional matching

ICTA88/S246W (1) - (9)

A company might match an FID with distributable foreign profits (DFP) of a subsequent accounting period after payment had been made by or to the company under the IHC rules outlined above. When this happened a further reckoning between the company and the Revenue was necessary.

Where a company:

  • paid an amount under ICTA88/S246U (2) in respect of an accounting period (CTM21550),
  • matched an FID paid in that accounting period with DFP of a later accounting period, and
  • would not have had to pay some of the amount under ICTA88/S246U (2) if the election for matching had been made before the relevant time (see below),

the company was entitled to repayment of the amount that it would not have had to pay.

Example of above

A worked example can be found at example 4 of CTM21280.

The repayment was treated as a repayment of ACT under ICTA88/S246N (CTM21405) which was paid in respect of a distribution made in the last return period falling within the accounting period (see also CTM21240).

Where a company:

  • either paid an amount under ICTA88/S246U (2) or was paid an amount under ICTA88/S246U (3) in respect of an accounting period (CTM21550), and
  • matched an FID paid in that accounting period with DFP of a later period, and
  • would have been entitled to be paid an amount under ICTA88/S246U (3) which was not paid to it, if the election for matching had been made before the relevant time

the company was entitled to payment of that amount to which it would have beenentitled. The payment was treated as a repayment of ACT for that accounting period under ICTA88/S246N (CTM21405).

The company had to make a claim for such payments and repayments. A return under TMA70/S11 or a separate notice, was treated as a claim if the claim contained the required particulars.

The relevant time for the purposes of these rules meant nine months from the end of the accounting period.