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

Circumstances in which Chapter applies

Section 259ZMA sets out the five conditions (A to E) that must all be met for the rules on allocating dual inclusion income within a group to apply.

• Condition A requires that one group company ("company A") has dual inclusion income exceeding its counteraction amount for a period (creating a "DII surplus"), while Condition B requires another group company ("company B") has a counteraction amount exceeding its dual inclusion income for a period (creating a "DII shortfall").
• Condition C requires that the accounting periods of company A and company B overlap in whole or in part, creating an "overlapping period" during which the surplus and shortfall coexist.
• Conditions D and E require that, during the overlapping period, both companies are within the charge to UK corporation tax and are members of the same group of companies.
• Any part of the overlapping period during which either company is not within the charge to corporation tax, or the two companies are not in the same group, is excluded from the overlapping period and treated as falling outside it for both the surplus period and the shortfall period.

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