Part 14Change in company ownership

Chapter 6Recovery of unpaid corporation tax

Miscellaneous

716Interest

(1)

Section 87A of TMA 1970 (interest on overdue corporation tax etc) has effect in relation to corporation tax assessed under section 710 or 713 (recovery of unpaid corporation tax) with the following modification.

(2)

That modification is that any reference to the date when the tax becomes due and payable is to be read as a reference to the date when the tax became due and payable—

(a)

in the case of an assessment under section 710 (recovery of tax for accounting period beginning before change), by X,

(b)

in the case of an assessment under section 713 (recovery of tax for accounting period ending on or after change), by Y or the associated company, depending on which is the company whose unpaid tax gave rise to the assessment.

717Effect of payment in pursuance of assessment under section 710 or 713

(1)

A payment—

(a)

in pursuance of an assessment under section 710 or 713 (recovery of unpaid corporation tax), or

(b)

of interest under section 87A of TMA 1970 (as that section has effect in accordance with section 716),

is not allowed as a deduction in calculating income, profits or losses for any tax purposes.

(2)

A person who makes such a payment may recover an amount equal to the payment—

(a)

in the case of an assessment under section 710 (recovery of tax for accounting period beginning before change), from X, or

(b)

in the case of an assessment under section 713 (recovery of tax for accounting period ending on or after change), from Y or the associated company, depending on which is the company whose unpaid tax gave rise to the assessment.

718Meaning of “associated company”

(1)

This section has effect for the purposes of sections 713 and 714.

(2)

“Associated company”, in relation to Y and an assessment to tax, means a company (whenever formed) which, at the time of the assessment or at an earlier time after the change in the ownership of Y—

(a)

has control of Y,

(b)

is a company of which Y has control, or

(c)

is a company under the control of the same person or persons as Y.