CTM16220 - Distributions: impact on Corporation Tax: franked investment income under the ACT system abolished from 6 April 1999 - surplus - claims under ICTA88/S242 - purposes of claim

ICTA88/S242 (2) & (8)

For accounting periods beginning before 2 July 1997 the legislation talks about the ‘purposesâ€� for which a claim may be made under ICTA88/S242. »Ê¹ÚÌåÓýappse ‘purposesâ€� were the setting-off of various unused reliefs against surplus franked investment income (FII) in order to receive payment of the tax credit on the FII.

Different time limits applied to claims in respect of each type of unused relief. »Ê¹ÚÌåÓýapp types of relief, and the time limits were:

  • »Ê¹ÚÌåÓýapp deduction of charges under ICTA88/S338 (see CTM09000 onwards). »Ê¹ÚÌåÓýapp time limit was 6 years from the end of the accounting period in which the company paid the charges.
  • »Ê¹ÚÌåÓýapp deduction of management expenses (see CTM08000 onwards). »Ê¹ÚÌåÓýapp time limit was 6 years from the end of the accounting period in which the company incurred the management expenses. »Ê¹ÚÌåÓýapp claim could include management expenses brought forward. For the purposes of the claim time limit management expenses brought forward were treated as incurred in the accounting period to which they were carried forward.
  • »Ê¹ÚÌåÓýapp set-off of certain capital allowances against total profits under CAA90/S145 (3) (subsequently CAA01/S260 (3); see CA29450). »Ê¹ÚÌåÓýapp time limit was 2 years from the end of the accounting period for which the capital allowances fell to be made. »Ê¹ÚÌåÓýapp claim could not include capital allowances brought forward.
  • »Ê¹ÚÌåÓýapp set-off of trading losses against total profits under ICTA88/S393A (1) (see CTM04500 onwards). »Ê¹ÚÌåÓýapp time limit was 2 years from the end of the accounting period in which the company incurred the trading loss. »Ê¹ÚÌåÓýapp claim could not include losses brought forward, but see CTM16250 in relation to financial concerns.
  • »Ê¹ÚÌåÓýapp set-off of losses on shares in unquoted companies under ICTA88/S573 (see CG58300). »Ê¹ÚÌåÓýapp time limit was 2 years from the end of the accounting period in which the company incurred the loss.
  • »Ê¹ÚÌåÓýapp set-off of non-trading deficits on loan relationships under FA96/S83 (2)(a). »Ê¹ÚÌåÓýapp time limit was 2 years from the end of the accounting period to which the relievable amount relates, or such further period as the Board may allow.