Corporation Tax Act 2009 section 1179CE

Amounts surrendered to other group companies

Section 1179CE sets out the rules for how expenditure credit amounts surrendered by a qualifying company to another member of its group are applied against that other group member's corporation tax liability.

• When a qualifying company surrenders expenditure credit to a fellow group member, the surrendered amount is matched against the recipient's corporation tax liabilities using a time-apportionment method based on overlapping accounting periods.
• The process allocates portions of the surrendered amount to each of the recipient's accounting periods that overlap with the surrendering company's accounting period, and offsets each portion against a corresponding proportion of the recipient's corporation tax for that period.
• Any part of the surrendered amount that cannot be used to discharge the recipient's corporation tax is treated as if it had never been surrendered, returning it to the surrendering company for further processing under the expenditure credit rules.
• The surrender itself is tax-neutral: it does not affect the taxable profits of either company and is not treated as a distribution for corporation tax purposes.