Corporation Tax Act 2010 section 717

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

Section 717 deals with the tax treatment of payments made to settle assessments for unpaid corporation tax following a change in company ownership, and the right to recover those payments from the party whose tax liability gave rise to the assessment.

• Payments made to settle assessments for unpaid corporation tax under the change of ownership recovery provisions, including any related interest, cannot be deducted when calculating income, profits or losses for any tax purposes.
• A person who makes such a payment has a legal right to recover an equivalent amount from the party whose unpaid tax triggered the assessment.
• Where the assessment relates to a pre-change accounting period, recovery is from entity X (the person from whom HMRC sought the tax under section 710).
• Where the assessment relates to an accounting period ending on or after the change, recovery is from entity Y or the associated company, depending on which company's unpaid tax gave rise to the assessment.