Introduction Equity holders Overview Section 140: Unrelieved part of claimant company’s available total profits
530.This section defines “unrelieved part of the claimant company’s available total profits” for the purpose of section 138. It is based onsections 403A, 403B and 403D of ICTA.
531.Subsection (1) introduces the rules for calculating the “unrelieved part of the claimant company’s available total profits”. In particular, the rules cater for the cases where:
	the surrendering company and the claimant company have different accounting periods; or
	there are other claims by the claimant company for the claim period.
532.Subsection (2) sets out the restriction to be made if the surrendering company and claimant company have different accounting periods. In that case the “surrender period” (see section 99(7)) and “claim period” (see section 130(2)) are not the same. The claimant company’s available total profits are apportioned on a time basis to the “overlapping period” (see section 142).
533.Subsection (3) introduces the calculation that has to be made if there are other claims by the claimant company for the claim period. It considers what “prior claims” have been made and what “previously claimed group relief” has been given as a result.
534.Subsection (4) defines a “prior claim”.
535.Subsection (5) is a method statement for calculating the total amount of any “prior claims”. The overlapping period for any relevant prior claim is given by section 142.
536.If no part of that overlapping period falls within the claim period of the current claim, that prior claim is ignored. But if part of theoverlapping period does fall within the claim period of the current claim a time-apportioned amount of the prior claim is taken into account.
537.The total of the amounts to be taken into account for relevant prior claims is deducted to arrive at the unrelieved amount of the claimant company’s total profits.
538.Subsection (6) apportions the previously claimed group relief to the period of the current claim.
539.Subsection (7) explains what is meant by “available total profits” in subsection (1). “Total profits” are defined in section 4 to include only amounts charged to corporation tax. So there is no need to exclude non-chargeable profits and section 403D(2)(a) of ICTA is not rewritten in this section.
540.Section 403A(2)(b) of ICTA refers to “total profits … reduced by … previously claimed group relief”. Such group relief can have been given only against profits “as reduced by any other relief” (section 407(1)(b) of ICTA). So subsection (7) of this section makes clear that the total profits must be reduced by such other relief before being further reduced by group relief.
541.Subsection (8) deals with the case of a claimant company that is not resident in the United Kingdom. Its available total profits do not include any profits that are “double taxation exempt” (see section 186).