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Our client has a group structure. The holding company (HC) has two wholly owned subsidiaries, one of which trades (TC) and one of which is a dormant company (DC).
In 2002, HC embarked upon a major restructuring exercise dictated by commercial external factors, which meant that it needed to clear all the trade and assets out of TC. As a result all the assets and trade of TC were transferred up to HC, leaving only a surplus advance corporation tax (ACT) asset in TC.
The surplus ACT could not be transferred up to HC, so it was transferred to DC.
Our client has a group structure. The holding company (HC) has two wholly owned subsidiaries, one of which trades (TC) and one of which is a dormant company (DC).
In 2002, HC embarked upon a major restructuring exercise dictated by commercial external factors, which meant that it needed to clear all the trade and assets out of TC. As a result all the assets and trade of TC were transferred up to HC, leaving only a surplus advance corporation tax (ACT) asset in TC.
The surplus ACT could not be transferred up to HC, so it was transferred to DC.
To date, DC has not yet started trading. Our simple question is whether readers can confirm that there is no time limit within which DC must start trading to be able to ultimately use the surplus ACT transferred to it. We are aware of all the shadow ACT implications and particularly that all group shadow ACT will have to be absorbed before this particular ACT could be used.
We can see no time limit imposed by any of the relevant sections, but may have missed something. Have we?
Query T16,630
