LLM7150 - Double taxation relief: corporate members: Regulations: calculating the foreign tax pool: transitional arrangements


If, for the first accounting period (AP) to which the corporate member pooling Regulations apply, there is an outstanding amount of foreign tax for an earlier period for which relief has not been given, the corporate member has a choice.

  • It may continue to deal with that relief under the previous rules (see LLM7180), in which case the corporate member must use the outstanding relief before using relieving tax within the pool.
  • It may bring the outstanding relief into the pool, in which case the sum of foreign tax must if appropriate be adjusted according to the rules described at LLM7120, restricting the amount added where the foreign tax rate for the foreign period of accounting exceeds the main UK CT rate for the corresponding AP.

If the corporate member opts to bring the outstanding relief into the pool, the formula at LLM7130 above is extended, and becomes

PASFT = AASFT + ATA + BFA.

ATA stands for the “additional transitional amount”.