Taxes Consolidation Act 1997 section 440

Surcharge on undistributed investment and estate income

Section 440 imposes an additional charge of corporation tax (a "surcharge") on close companies where distributable investment and estate income exceeds distributions for an accounting period.

• A surcharge of 20% applies to the amount by which a close company's distributable estate and investment income exceeds its distributions for an accounting period.
• No surcharge arises where the excess is €2,000 or less; where there are associated companies, the €2,000 threshold is divided by one plus the number of associated companies.
• Marginal relief restricts the surcharge to 80% of the amount by which the excess exceeds €2,000, with marginal relief exhausted once the excess reaches €2,666.
• The surcharge is charged for the earliest accounting period ending 12 months or more after the surcharged period, and is collected and enforced under the normal corporation tax rules.

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