The Corporation Tax (Treatment of Unrelieved Surplus Advance Corporation Tax) (Amendment) Regulations 2010

• Citation: S.I. 2010/669
• Sections: 7

Section 1 Citation and commencement

These Regulations may be cited as the Corporation Tax (Treatment of Unrelieved Surplus Advance Corporation Tax) (Amendment) Regulations 2010 and shall come into force on 1st April 2010.

Section 2 Amendment of the Corporation Tax (Treatment of Unrelieved Surplus Advance Corporation Tax) Regulations 1999

The Corporation Tax (Treatment of Unrelieved Surplus Advanced Corporation Tax) Regulations 1999 are amended as follows.

Section 3 Amendment of regulation 3

In regulation 3(1) (interpretation)—

(a) before “accounting period” insert—

“abnormal dividend” has the meaning given by regulation 6A;

(b) omit “the Board” means the Commissioners of Inland Revenue”;

(c) before “distribution” insert—

“company” in regulation 6A means a company referred to in section 733 (company liable to counteraction of corporation tax advantage) of the Corporation Tax Act 2010 ;

“the CTA ” means the Corporation Tax Act 2010

(d) for the definition of “franked investment income” substitute—

“franked investment income” means income of a company resident in the United Kingdom which consists of a distribution in respect of which the company is entitled to a tax credit (and which accordingly represents income equal to the aggregate of the amount or value of the distribution and the amount of that credit), except that it does not include income to which regulations 7, 8(4), 9 or 10A refer, nor income falling within regulation 10 where paragraph (4) of that regulation does not apply;

Section 4 Insertion of regulation 6A

After regulation 6 (definition of a group) insert—

Abnormal dividends: general

(6A)

(1) In regulation 10A an abnormal dividend has been received by a company where section 740 (abnormal dividends: general) of the CTA as modified by paragraph (2) has been applied to it.

(2) For the purposes of regulation 10A, an amount received by way of dividend in subsection (1) of section 740 of the CTA shall, for the avoidance of doubt, be interpreted as being in connection with—

(a) the purchase of securities where the purchase is followed by the sale of the same or other securities,

(b) the sale of securities where the sale is followed by the purchase of the same or other securities,

(c) the distribution, transfer or realisation of assets of a company, or

(d) the application of such assets in discharge of liabilities.

Section 5 Insertion of regulation 10A

After regulation 10 (restriction on franked investment income – intra-group distributions) insert—

Restriction on franked investment income – abnormal dividends

(10A)

(1) For the purposes of these Regulations an abnormal dividend shall not be regarded as franked investment income where it has been received by—

(a) company (R1) from company (P1) where P1 and R1 are not members of a group, or

(b) company (R2) from company (P2) where P2 and R2 are members of the same group.

(2) Sub-paragraph (b) of paragraph (1) shall apply notwithstanding that company P2 has made an election under regulation 11(3)(b).

Section 6 Substitution of “an officer of Revenue and Customs”

In each place where “an officer of the Board” occurs substitute “an officer of Revenue and Customs”.

Section 7 Omission of regulation 23

Omit regulation 23 (cancellation of tax advantage).