Valid from 03/05/1994
Modifications etc. (not altering text)
C1Pt. 6 Ch. 5A modified (retrospective to 8.10.1996) by Finance Act 1997 (c. 16), Sch. 7 para. 2(1)(3)
Textual Amendments
F1Pt. 6 Ch. 5A (ss. 246A-246Y) inserted (3.5.1994) by Finance Act 1994 (c. 9), Sch. 16 para. 1
(1)This section and section 246Q apply where—
(a)a company pays a foreign income dividend in an accounting period (the relevant period), and
(b)the company does not treat itself as an international headquarters company at any time in the period by virtue of section 246S(9).
(2)In a case where—
(a)the company pays an amount of advance corporation tax in respect of qualifying distributions actually made by it in the relevant period,
(b)the amount, or part of it, is available to be dealt with under this section, and
(c)there is as regards the company an amount of notional foreign source advance corporation tax for the relevant period,
an amount of the advance corporation tax paid shall be repaid to the company, or set off, or partly repaid and partly set off, in accordance with this section and section 246Q.
(3)In the following provisions of this section “the relevant advance corporation tax” means the advance corporation tax paid as mentioned in subsection (2)(a) above.
(4)The amount of the relevant advance corporation tax to be repaid or (as the case may be) set off, or partly repaid and partly set off, is whichever of the following is smaller—
(a)so much of the relevant advance corporation tax as is available to be dealt with under this section;
(b)so much of the relevant advance corporation tax as is equal to the amount which is, as regards the company, the amount of notional foreign source advance corporation tax for the relevant period (found under section 246P).
(5)So much of the relevant advance corporation tax as remains after deducting the aggregate of the deductible amounts is available to be dealt with under this section; and each of the following is a deductible amount—
(a)an amount equal to so much (if any) of the relevant advance corporation tax as has been repaid;
(b)an amount equal to so much (if any) of the relevant advance corporation tax as has been set off against the company’s corporation tax liability for the relevant period under section 239(1) or, if there is—
(i)any amount of advance corporation tax from a preceding accounting period,
(ii)any amount of surrendered advance corporation tax, or
(iii)any amount of advance corporation tax from a succeeding accounting period,
as would have been so set off if there had been no amounts as mentioned in sub-paragraphs (i) to (iii) above;
(c)an amount equal to so much (if any) of the relevant advance corporation tax as has been dealt with under section 239(3);
(d)an amount equal to so much (if any) of the relevant advance corporation tax as is advance corporation tax the benefit of which has been surrendered by the company under section 240;
(e)an amount equal to so much (if any) of the relevant advance corporation tax as has been set off against the company’s corporation tax liability for the relevant period by virtue of the previous application of this section and section 246Q.
(6)For the purposes of subsection (5)(b) above—
(a)advance corporation tax from a preceding accounting period is advance corporation tax which by virtue of section 239(4) is treated for the purposes of section 239 as paid by the company in respect of distributions made by it in the relevant period;
(b)surrendered advance corporation tax is advance corporation tax which by virtue of section 240 is so treated;
(c)advance corporation tax from a succeeding accounting period is advance corporation tax which by virtue of section 239(3) is so treated;
and in applying subsection (5)(b) above in a case where there is any amount as mentioned in subsection (5)(b)(i) to (iii), it shall be assumed that the company would not have surrendered the benefit of any of the relevant advance corporation tax under section 240.
(7)No amount shall be repaid or set off under this section and section 246Q unless the company makes a claim for the purpose.