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Amendment of Chapter 5 of Part 12 of Principal Act (group relief)
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43. (1) The Principal Act is amended in Chapter 5 of Part 12—
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(a) in section 422, by the substitution of the following subsection for subsection (2):
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“(2) Where an accounting period of the surrendering company and a corresponding accounting period of the claimant company do not coincide—
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(a) the amount which may—
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(i) be set off against the total profits under section 420,
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(ii) under subsection (3) of section 420A, be set off against income specified in subparagraph (i), (ii) or (iii) of paragraph (a) of that subsection, or
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(iii) reduce the relevant corporation tax under subsection (3) of section 420B,
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of the claimant company for the corresponding accounting period, shall be reduced by applying the fraction—
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(A)/(B)
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(if that fraction is less than unity), and
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(b) the amount of—
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(i) the total profits against which the amount mentioned in paragraph (a)(i) (as reduced where so required) may be set off,
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(ii) the income against which the amount mentioned in paragraph (a)(ii) (as reduced where so required) may be set off, and
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(iii) the relevant corporation tax (within the meaning of section 420B) which may be reduced by the amount mentioned in paragraph (a)(iii) (as reduced where so required),
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shall be reduced by applying the fraction—
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(A)/(C)
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(if that fraction is less than unity),
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where—
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A is the length of the period common to the 2 accounting periods,
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B is the length of the accounting period of the surrendering company, and
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C is the length of the corresponding accounting period of the claimant company.”,
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(b) in section 423—
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(i) in subsection (2), by the substitution of the following paragraph for paragraph (b):
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“(b) that the amount of total profits, income or relevant corporation tax for the true accounting period of the company against which group relief may be allowed in accordance with section 421(2), 420A(3) or 420B(3), as the case may be, is also so apportioned to the component accounting periods.”,
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and
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(ii) in subsection (3)—
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(I) by the substitution of the following paragraph for paragraph (a):
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“(a) references in—
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(i) section 420 to accounting periods, profits, losses, allowances, expenses of management and charges on income of the surrendering company,
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(ii) section 420A to accounting periods, relevant trading loss, relevant trading charges on income (or an excess thereof) and income (against which amounts may be set off under section 420A(3)), and
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(iii) section 420B to accounting periods, relevant trading loss, relevant trading charges on income (or an excess thereof), relevant corporation tax and relievable loss,
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shall be construed in accordance with subsection (2);”;
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and
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(II) by the substitution of the following paragraph for paragraph (c):
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“(c) references in section 422 to—
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(i) the amount which may—
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(I) be set off against the total profits under section 420,
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(II) under subsection (3) of section 420A, be set off against income specified in paragraph (a)(i), (a)(ii) or (a)(iii) of that subsection, or
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(III) reduce the relevant corporation tax under subsection (3) of section 420B,
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and
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(ii) total profits, income and relevant corporation tax, shall be so construed that an amount apportioned under subsection (2) to a component accounting period may fall to be reduced under section 422(2).”,
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and
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(c) in section 428(4)—
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(i) by the deletion of “to be set off against its total profits”, and
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(ii) by the deletion of “to be set off against its profits”.
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(2) This section shall apply for accounting periods commencing on or after 1 January 2024.
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