Multinational Top-up Tax and Domestic Top-up Tax

MTT62310 - Charging mechanisms: Undertaxed Profits Rule: Allocation of untaxed amounts

Any untaxed amounts (see MTT62110) of the members of the group must be allocated between the qualifying members in accordance with section 229C of Finance (No.2) Act 2023.

To determine the amount to be allocated, the group must first determine the proportion of the total untaxed amount to be allocated to the UK (see MTT62320).

Once the UK proportion has been determined, it is allocated between qualifying members that are located in the UK (see MTT62330).

Qualifying member

Under the UTPR, a ‘qualifying member’ is any member of a group except for investment entities and joint venture group members.

Where there are no qualifying members located in the UK, none of the total top-up amount will be allocated to the UK.