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Finance (No. 2) Act 2023

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Changes over time for: Cross Heading: Additional top-up amounts on recalculations

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Additional top-up amounts on recalculationsU.K.

206Additional top-up amounts where recalculations requiredU.K.

(1)This section applies to the standard members [F1(“the current members”)] of a multinational group in an accounting period (“the current period”) in a territory where—

(a)a recalculation is required in the current period in relation to one or more previous accounting periods (each a “prior period”) as a result of any of the following sections—

(i)section 163(4);

(ii)section 184(2);

(iii)section 217(5);

(iv)section 219(1), or

(b)the [F2current] members have a special additional top-up tax amount under section 192 for the current period.

(2)Where—

(a)the sum of the top-up amounts that [F3the standard members of the group in the territory in a prior period would have for that period], determined in accordance with a recalculation required under one of the sections mentioned in subsection (1)(a), is greater than the sum of the top-up amounts those members had for that prior period, or

(b)this section applies as a result of subsection (1)(b) (whether or not it also applies as a result of subsection (1)(a)),

the [F4current] members collectively have an additional top-up amount (a “collective additional amount”) under this section for the current period.

(3)Take the following steps to determine the collective additional amount under this section

  • Step 1

    Where one or more recalculations are required in accordance with any of the sections mentioned in subsection (1)(a), for each prior period carry out the recalculation or recalculations required in respect of that period to establish the top-up amounts [F5the standard members of the group in the territory for the prior period would have had for that period] (taking account of all recalculations required for that period).

  • Step 2

    For each prior period, subtract the sum of the top-up amounts those members had for that prior period from the sum of top-up amounts that those members would have for that period.

  • Step 3

    Add together all of the results of Step 2 that are greater than nil [F6(and if there are no such results, the result of this step is nil)].

  • Step 4

    Where the [F7current] members have a special additional top-up tax amount under section 192 for the current period, add that amount to the result of [F8Step 3] (which may be nil).

(4)Where [F9the current members] have a QDT credit for the accounting period, the collective additional amount under this section is to be reduced [F10as follows])

(5)Where—

(a)the [F11current] members do not have a collective additional amount under section 203 for the [F12current] period,

(b)the total top-up amount for the current period for the [F13current members] is nil, and

(c)the collective additional amount under this section (before [F14any reduction]) is equal to or greater than the sum of amounts of qualifying domestic top-up tax accrued by those members in that period,

the collective additional amount under this section is to be reduced by the sum of those accrued amounts.

(6)Where—

(a)the [F15current] members do not have a collective additional amount under section 203 for the [F16current] period,

(b)the total top-up amount for the current period for the [F17current members] is nil, and

(c)the collective additional amount under this section (before [F18any reduction]) is less than the sum of amounts of qualifying domestic top-up tax accrued by those members in that period,

the collective additional amount under this section is to be reduced to nil.

(7)Where—

(a)the [F19current] members have a collective additional amount under section 203 for the [F20current] period or the total top-up amount for the current period for [F21the current members] is greater than nil, and

(b)the sum of the collective additional amount under this section (before [F22any reduction]), any collective additional amount under section 203 and the total top-up amount for the current period for the [F23current members] is less than the sum of amounts of qualifying domestic top-up tax accrued by those members in that period,

the collective additional amount under this section is to be reduced to nil.

(8)Where—

(a)the [F24current] members have a collective additional amount under section 203 for the period or the total top-up amount for the current period for [F25the current members] is greater than nil, and

(b)the sum of the collective additional amount under this section (before [F26any reduction]), any collective additional amount under section 203 and the total top-up amount for the current period for the [F27current members] is equal to or greater than the sum of amounts of qualifying domestic top-up tax accrued by those members in that period,

the collective additional amount under this section is to be reduced by the [F28relevant amount.]

[F29(9)The relevant amount is the amount given by multiplying—

(a)the sum of the amounts of qualifying domestic top-up tax accrued by the current members in the current period, by

(b)the amount given by dividing—

(i)the collective additional amount under this section, by

(ii)the sum of that collective additional amount, any collective additional amount under section 203 and the total top-up amount for the current period.]

Textual Amendments

F1Words in s. 206(1) inserted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(2)(a), 72(4)

F2Word in s. 206(1)(b) inserted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(2)(b), 72(4)

F3Words in s. 206(2)(a) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(3)(a), 72(4)

F4Word in s. 206(2) inserted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(3)(b), 72(4)

F5Words in s. 206(3) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(4)(a), 72(4)

F6Words in s. 206(3) inserted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(4)(b), 72(4)

F7Word in s. 206(3) inserted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(4)(c)(i), 72(4)

F8Words in s. 206(3) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(4)(c)(ii), 72(4)

F9Words in s. 206(4) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(5)(a), 72(4)

F10Words in s. 206(4) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(5)(b), 72(4)

F11Word in s. 206(5)(a) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(6)(a)(i), 72(4)

F12Word in s. 206(5)(a) inserted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(6)(a)(ii), 72(4)

F13Words in s. 206(5)(b) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(6)(b), 72(4)

F14Words in s. 206(5)(c) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(6)(c), 72(4)

F15Word in s. 206(6)(a) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(7)(a)(i), 72(4)

F16Word in s. 206(6)(a) inserted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(7)(a)(ii), 72(4)

F17Words in s. 206(6)(b) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(7)(b), 72(4)

F18Words in s. 206(6)(c) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(7)(c), 72(4)

F19Word in s. 206(7)(a) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(8)(a)(i), 72(4)

F20Word in s. 206(7)(a) inserted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(8)(a)(ii), 72(4)

F21Words in s. 206(7)(a) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(8)(a)(iii), 72(4)

F22Words in s. 206(7)(b) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(8)(b)(i), 72(4)

F23Words in s. 206(7)(b) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(8)(b)(ii), 72(4)

F24Word in s. 206(8)(a) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(9)(a)(i), 72(4)

F25Words in s. 206(8)(a) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(9)(a)(ii), 72(4)

F26Words in s. 206(8)(b) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(9)(b)(i), 72(4)

F27Words in s. 206(8)(b) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(9)(b)(ii), 72(4)

F28Words in s. 206(8) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(9)(c), 72(4)

F29S. 206(9) inserted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 38(10), 72(4)

207Allocation of collective additional amounts under section 206 to membersU.K.

(1)Where the standard members of a multinational group in a territory have a collective additional amount under section 206 for an accounting period (“the current period”), that amount is to be allocated to those members as follows—

  • Step 1

    Determine the sum of the top-up amounts that those members would have (in prior accounting periods) in accordance with the recalculation, or recalculations, that relate to that collective additional amount.

  • Step 2

    Determine the sum of the top-up amounts that each of those members would have in accordance with the recalculation, or recalculations, that relate to the collective additional amount.

  • Step 3

    For each member where the result of Step 2 is greater than nil, divide that result by the result of step 1.

  • Step 4

    Each such member has an additional top-up amount under this section equal to the amount given by multiplying the collective additional amount by the result of Step 3 for that member.

(2)Chapter 7 (allocation of top-up amounts to responsible members)—

(a)applies to an additional top-up amount allocated to a member of a multinational group under this section as it applies to a top-up amount of that member, and

(b)if the result of Step 2 in section 132(1) in relation to the standard members of the group for the current period is nil or less (those members between them have made a loss), has effect as if the adjusted profits of that member were the amount given by dividing the additional top-up amount by 15%.

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