INTM558085 - Hybrids: dual territory double deduction (Chapter 10): stranded deductions

Stranded deductions arise when the dual territory double deduction amount can no longer be deducted from dual inclusion income following a permanent change in circumstances.

Where relief is possible it is given in step 2 section 4(2) CTA 2010 in calculating the company’s taxable total profits.

Stranded deductions – Dual Resident Company

If the Commissioners are satisfied that the company has ceased to be a dual resident company and the company has not been able to deduct the dual territory double deduction amount from dual inclusion income of subsequent periods, then the stranded deduction may be deducted from the company’s total profits in the period in which it ceased to be dual resident, or in subsequent accounting periods.

Stranded deductions – Relevant Multinational Company

If the Commissioners are satisfied that the company has ceased to be a relevant multinational company and the UK PE has not been able to deduct the dual territory double deduction amount from dual inclusion income of subsequent periods, then the stranded deduction may be deducted from the PE’s total profits in its final accounting period (that is, the period in which the company ceased to be a relevant multinational company).

Where stranded deductions need to be considered by the Commissioners full details should be sent to the Base Protection Policy team, BAI

By email to [email protected], or

By post to

HM Revenue & Customs
Base Protection Policy Team
Business Assets & International
S0862
Floor 4 Rear
Central Mail Unit
Newcastle
NE98 1ZZ