Corporation Tax Act 2010 section 269ZYB

Provisional application of section 269ZYA

Section 269ZYB allows a company that has no source of chargeable income to make a provisional declaration in its tax return, so that it can benefit from the deductions allowance under section 269ZYA on an interim basis before a formal claim is made.

• Where a company's tax return is filed before the end of the financial year in which the accounting period falls, and the conditions for claiming additional deductions allowance are met, the company may include a provisional declaration in its return stating it had no source of chargeable income (and neither did any other group member) and that it intends to make a formal claim
• While the declaration remains in effect, the company is treated as though it had already made a formal claim under section 269ZYA, giving it access to the full deductions allowance of £25 million rather than having to share a group allowance
• The declaration ceases to have effect if it is withdrawn, replaced by a formal claim, or if the company (or any group member) acquires a source of chargeable income before the end of the relevant financial year — and in any event it expires automatically two years after the end of the accounting period
• If the declaration ceases to have effect for any reason, all necessary adjustments must be made by way of assessment, amendment of returns, or otherwise, and normal time limits for making such adjustments are overridden to ensure corrections can be carried out