Rule 118 - Relief in tax payable under section 206(1) due to operation of section 206(1)(i)

Relief in tax payable reduces company tax by a prescribed formula for past income adjustments and prescribes claim procedure.

Rule 118 establishes the relief calculation for reducing tax payable under section 206(1) due to past income: the reduction equals (A - B) - (C - D), with A and B the tax on book profit including and excluding past income for the tax year, and C and D the aggregate tax on book profit of past years after and before inclusion of the past income; negative amounts are treated as zero. Past income arises from advance pricing agreements or required secondary adjustments. The relief reduces the credit under section 206(1)(m) and must be claimed in Form 53, uploaded and verified electronically.