Taxation (International and Other Provisions) Act 2010 section 259ZMC

The unused part of the DII surplus

Section 259ZMC explains how to calculate the unused part of Company A's dual inclusion income (DII) surplus that remains available for a new allocation claim by Company B, after accounting for any earlier claims already made against the same surplus.

• The unused part of the DII surplus for an overlapping period is the time-apportioned DII surplus for that period, minus any amounts already allocated through prior claims
• The DII surplus for the overlapping period is calculated by taking the proportion of the surplus period that falls within the overlapping period and applying that fraction to the total DII surplus
• Prior allocations are identified by checking earlier, unrevoked allocation claims that relate to the same surplus period, and then determining how much of each prior claim falls within the current overlapping period
• Where multiple allocation claims are made simultaneously, the companies may jointly elect the order in which they are treated as made; failing that, HMRC may direct the order

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