CREC073400 - Expenditure credit redemption: example 4 - credit received from group member
CT = Corporation Tax
AP = accounting period
Company 4 |
Values |
Profit |
£400,000 |
CT liability @ 25% |
£100,000 |
Credit for this AP |
£75,000 |
Credit brought forward |
nil |
Credit received from group member(s) |
£25,000 |
CT liability of other AP(s) |
nil |
Other liabilities |
nil |
PRE-STEP 1 RESTRICTION
The amount of credit brought forward and the amount of credit received from group member(s) are used, in that order, to discharge the CT liability for this AP.
- |
Values |
Credit received from group member(s) |
£25,000 |
CT liability |
£100,000 |
CT liability after discharge |
£75,000 |
Excess credit received from group member(s) |
nil |
If there were any excess credit remaining after discharge, it would be treated as if it had not been surrendered. The surrendering company should adjust its calculations as necessary.
STEP 1
The credit amount for this AP is used to discharge the remaining CT liability for this AP.
- |
Values |
Credit for this AP |
£75,000 |
Remaining CT liability |
£75,000 |
CT liability after discharge |
nil |
Credit remaining after discharge |
nil |
STEPS 2 TO 6
As there is no more credit remaining after Step 1, there is no need to apply Steps 2 to 6.
SURRENDER TO GROUP MEMBER
If the company is a member of a group, it may surrender some or all of the amount withheld at Step 2, plus any credit brought forward and not used at the pre-Step 1 restriction, to any other member of the same group.
Company 4 has no amount of credit withheld at Step 2 or unused credit brought forward, so there is no need to consider a surrender.
AMOUNTS CARRIED FORWARD
Any amount withheld at Step 2 and/or any unused credit brought forward which is not surrendered to a group member is carried forward to the next AP.
Company 4 has no amount of credit withheld at Step 2 or unused credit brought forward, so there is no amount carried forward.