Attribution account surpluses and attributed tax account surpluses
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Under consolidation, only the head company needs to operate attribution accounts and attributed tax accounts for the purposes of the FIF measures during the period of consolidation.
The pre-consolidation balances of the attribution accounts and attributed tax accounts of subsidiary members of the group are transferred to the head company so it can use any pre-consolidation surpluses during consolidation.
The attribution and attributed tax accounts of subsidiary members of a consolidated group become inoperative during the period of consolidation once the balances in those accounts have been transferred to the head company.
The attribution and attributed tax account surpluses are transferred to the head company so that future distributions of income received from an attribution entity - for example, a FIF - are not assessed to the head company to the extent that the income was previously attributed to the joining company.
When a company with an interest in a FIF leaves a group, a proportion of the head company's attribution and attributed tax account surpluses that leave the group with the leaving company are transferred to the leaving company.
The date of effect of the provisions relating to attribution accounts and attributed tax accounts is 1 July 2002. These provisions are in the New Business Tax System (Consolidation, Value Shifting, Demergers and Other Measures) Act 2002.
Last modified: 27 May 2005QC 17512