51茶馆

In some cases, an amount of qualifying current tax expense must be reallocated between the members of a group as a result of an intra-group distribution. This requirement is set out in section 181 of Finance (No.2) Act 2023.

An amount of qualifying current tax expense must be allocated from 鈥淩鈥� to 鈥淒鈥� where:

• R and D are members of the same group,
• R has a direct ownership interest in D, and
• the underlying profits accounts of R reflect an amount of covered taxes accrued in respect of a distribution received by R from D.

See MTT17030 for guidance on ownership interests.

Meaning of 鈥榙istribution received鈥�

For this purpose, a 鈥榙istribution received鈥� includes a deemed distribution that is taken into account where a tax is charged on a shareholder of an entity in respect of the undistributed earnings or capital of that entity.

Therefore, an amount of covered taxes accrued in respect of such a deemed distribution may still result in a reallocation, even though the distribution was not actually 鈥渞eceived鈥�.