Finance (No. 2) Act 2023

298 Surrender of shortfalls U.K.

(1) This section applies where in an overlap period for two related generating undertakings—

(a) one of those undertakings (“A”) has a shortfall amount for the overlap period, and

(b) the other undertaking (“B”) has exceptional generation receipts for the overlap period.

(2) To determine if an undertaking has a shortfall amount or exceptional generation receipts for an overlap period, carry out all of the steps in section 279(5) as if the period were a qualifying period, including steps that would normally be ignored because a result of nil or less has already been found.

(3) If the result of Step 5 is less than nil, that result (expressed as a positive number) is a shortfall amount.

(4) Where this section applies, an amount of the shortfall amount of A may be surrendered to B.

(5) Section 299 sets out how much of the shortfall amount may be surrendered by A to B.

(6) Two generating undertakings are related generating undertakings if—

(a) one is—

(i) a joint venture undertaking, or

(ii) a generating undertaking that is a group that has at least one subsidiary member who has at least one significant minority shareholder, and

(b) the other is a relevant shareholder in the other.

(7) A generating undertaking (“C”) is a relevant shareholder in another generating undertaking (“D”) if—

(a) where D is a joint venture undertaking, C is a participant in the joint venture that comprises, or is the principal member of, the joint venture undertaking, or

(b) where D is a generating undertaking that is a group that has at least one subsidiary member who has at least one significant minority shareholder, C is a significant minority shareholder in a subsidiary member of D.

(8) In this section “overlap period” in relation to two generating undertakings means—

(a) where a qualifying period of one of the generating undertakings wholly corresponds with a qualifying period of the other, such a period, and

(b) where a qualifying period of one generating undertaking does not wholly correspond with a qualifying period of the other, a period—

(i) that commences at the same time as a qualifying period of one of them, and

(ii) that ends with the earlier of the end of that qualifying period or the end of the last qualifying period of the other undertaking to commence on or before that qualifying period.