Taxes Consolidation Act 1997 section 422

Corresponding accounting periods

Section 422 defines what constitutes a "corresponding accounting period" for group relief purposes and sets out how relief must be apportioned on a time basis where the accounting periods of the surrendering and claimant companies do not coincide.

• An accounting period of the claimant company that falls wholly or partly within an accounting period of the surrendering company is treated as the "corresponding accounting period" for group relief purposes.
• Where the two accounting periods do not exactly coincide, the amount of relief that can be surrendered is restricted to the proportion that the common period bears to the surrendering company's full accounting period (fraction A/B).
• The profits (or income, or relevant corporation tax) of the claimant company against which the surrendered relief may be set are similarly restricted to the proportion that the common period bears to the claimant company's full corresponding accounting period (fraction A/C).
• Both restrictions apply equally to trading losses, excess management expenses, and value basis relief under sections 420, 420A, and 420B; the actual group relief available is the lower of the two apportioned figures.