Where a parent company has paid ACT in respect of a dividend
paid by it in an accounting period prior to 6 April 1999, it may
claim within six years after the end of that accounting period to
surrender the whole or part of the ACT to one or more companies
which were its 51% subsidiaries throughout that accounting period.
Because Section 239 (1) relief is not the subject of a claim
(despite Section 239 (5)) there is no claim under Section 239 (1)
which can be treated as final. So there is nothing to prevent a
Section 240 surrender claim overriding the provisions of Section
239 (1) provided all the necessary statutory requirements are
fulfilled.
FA89/S157 applies to accounting periods ending on or before
30 September 1993. Until FA89/S157 was introduced, companies could
obtain the benefit of a mismatch in the interest/repayment
supplement provisions, by surrendering ACT which had previously
been used under ICTA88/S239 (1). Where the claim to surrender is
made on or after 14 March 1989 FA89/S157
CTM81235 applies. It charges interest
under TMA70/S86 on the surrendering company's increased CT
liability. This ensures the reallocation of ACT does not produce an
advantage through interest/repayment supplement mismatch.
When a Section 240 claim is made after the ACT has been
previously used under Section 239 (1), the Section 239 (1) set-off
becomes excessive and an assessment is required to recover the tax
under ICTA88/S252 (
CTM20260).
