Income and Corporation Taxes Act 1988

[F1747A Special rule for computing chargeable profits.U.K.

(1)Subsection (2) below applies where for the purposes of this Chapter a company’s chargeable profits fall to be determined for—

(a)the first relevant accounting period of the company, or

(b)any subsequent accounting period of the company.

(2)Notwithstanding any other rule (whether statutory or otherwise) the chargeable profits for any such period shall be computed and expressed in the currency used in the accounts of the company for its first relevant accounting period.

(3)Subsection (4) below applies where for the purposes of this Chapter a company’s chargeable profits fall to be determined for any accounting period of the company which—

(a)begins on or after the appointed day, and

(b)falls before the company’s first relevant accounting period.

(4)Notwithstanding any other rule (whether statutory or otherwise) the chargeable profits for any such period shall be computed and expressed in the currency used in the accounts of the company for the accounting period concerned.

(5)For the purposes of this section the first relevant accounting period of the company shall be found in accordance with subsections (6) to (8) below.

(6)Where [F2an apportionment under section 747(3) has fallen to be made] as regards an accounting period of the company which begins before its commencement day, its first relevant accounting period is its accounting period which begins on its commencement day.

(7)F3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)Where F4. . . subsection (6) above does not apply, [F5the company’s] first relevant accounting period is its first accounting period which begins on or after its commencement day and as regards which—

[F6(a)an apportionment under section 747(3) has fallen to be made, or

(b)it can reasonably be assumed that such an apportionment would have fallen to be made, but for the fact that the company pursued, within the meaning of Part I of Schedule 25, an acceptable distribution policy,]

[F7unless the company is a trading company, in which case paragraph (b) above shall be disregarded in the case of its accounting periods beginning before 28th November 1995.]

(9)For the purposes of this section—

(a)a company’s commencement day is the first day of its first accounting period to begin after the day preceding the appointed day;

[F8(b)“the appointed day” is 23rd March 1995.]

(10)References in this section to the accounts of a company—

(a)are to the accounts which the company is required by the law of its home State to keep, or

(b)if the company is not required by the law of its home State to keep accounts, are to the accounts of the company which most closely correspond to the individual accounts which companies formed and registered under the M1Companies Act 1985 are required by that Act to keep;

and for the purposes of this subsection the home State of a company is the country or territory under whose law the company is incorporated or formed.]

Textual Amendments

F2Words in s. 747A(6) substituted (with effect in accordance with Sch. 17 para. 37 of the amending Act) by Finance Act 1998 (c. 36), Sch. 17 para. 2(2); S.I. 1998/3173, art. 2

F3S. 747A(7) repealed (with effect in accordance with s. 182 of the repealing Act) by Finance Act 1996 (c. 8), Sch. 36 para. 1(2), Sch. 41 Pt. 5(34), Note

F4Words in s. 747A(8) repealed (with effect in accordance with s. 182 of the repealing Act) by Finance Act 1996 (c. 8), Sch. 36 para. 1(3)(a), Sch. 41 Pt. 5(34), Note

F5Words in s. 747A(8) substituted (with effect in accordance with s. 182 of the amending Act) by Finance Act 1996 (c. 8), Sch. 36 para. 1(3)(b)

F6S. 747A(8)(a)(b) substituted (with effect in accordance with Sch. 17 para. 37 of the amending Act) by Finance Act 1998 (c. 36), Sch. 17 para. 2(3); S.I. 1998/3173, art. 2

F7Words in s. 747A(8) inserted (with effect in accordance with s. 182 of the amending Act) by Finance Act 1996 (c. 8), Sch. 36 para. 1(3)(c)

F8S. 747A(9)(b) substituted (with effect in accordance with s. 79(3) of the amending Act) by Finance Act 2002 (c. 23), Sch. 23 para. 19 (with s. 81(4)(5), Sch. 23 para. 25)

Modifications etc. (not altering text)

Marginal Citations