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That gift horse again

Keith Gordon's suggestion ( Taxation 3 February 2005 page 426) for 'wiping the slate clean' of brought forward non-corporate distributions by disclaiming the benefit of the small companies' or starting companies' rates might not go unchallenged by the Revenue even if it is based on Revenue internal guidance. His article is based on an explanation in a Revenue manual of how the rules work not on the legislation or on a statement of practice. FA 2004 Sch 3 para 2 does refer to a company which 'is entitled to and claims' small companies rate or starting rate reliefs that is part of determining the underlying rate of corporation tax.

FA 2004 s 28 only applies to an accounting period in which the underlying rate is less than the NCD rate so it is true (in the...