Taxes Consolidation Act 1997 section 160

Set-off of advance corporation tax

Section 160 set out the rules for setting advance corporation tax (ACT) paid on distributions against a company's corporation tax liability, with provision to carry surplus ACT back twelve months or forward indefinitely until it could be absorbed.

• ACT paid on distributions in an accounting period was set against the company's corporation tax liability on income (not chargeable gains) for that same period.
• "Surplus ACT" was ACT that could not be absorbed because there was insufficient income charged to corporation tax, or because of reliefs reducing that tax.
• A claim could carry surplus ACT back against accounting periods ending in the previous twelve months (claim within two years), with any balance carried forward indefinitely to future periods.
• The section was deleted by section 41 of the Finance Act 2003 for accounting periods ending on or after 6 February 2003, in line with the abolition of the ACT system.