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HMRC internal manual

Company Taxation Manual

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HM Revenue & Customs
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Groups & consortia: groups - entitlement to profits or assets available for distribution: varying and limited rights - effect

ICTA88/SCH18/PARA5 (5) and ICTA88/SCH18/PARA5A

There are four different possible determinations of profits and of assets in a winding-up where CTM81060 and CTM81065 apply as well as CTM81070 and CTM81075. The four possible combinations of accounting periods and treatment of rights are:

  • rights of a different accounting period, treating limited rights as waived,
  • rights of the current accounting period, treating limited rights as waived,
  • rights of a different accounting period (not treating limited rights as waived),
  • rights of the current accounting period (not treating limited rights as waived).
Rights of current accounting period Rights of a different accounting period
   
Limited rights treated as waived Limited rights treated as waived
No special treatment of rights No special treatment of rights

The lowest percentage entitlement to profits arising from these combinations is taken for the purposes of ICTA88/SCH18/PARA2 (1).

The lowest percentage entitlement to assets in a winding-up is taken for the purposes of ICTA88/SCH18/PARA3 (1).