Section 128 Responsible members

United Kingdom

(1)

The ultimate parent of a multinational group is a responsible member of that group if it is subject to Pillar Two IIR tax.

(2)

An ultimate parent that is a responsible member of a multinational group is responsible for all of F1the members of the group that are not located in the territory F2the ultimate parent is located in.

(3)

An intermediate parent member of a multinational group (see section 237(2)) that is located in a Pillar Two territory is a responsible member of that group if it is subject to Pillar Two IIR tax and—

(a)

no intermediate parent member of that group that is subject to Pillar Two IIR tax has a controlling interest in it,

(b)

the ultimate parent is not subject to Pillar Two IIR tax, and

F3(c)

at least one member of the group in which it has an ownership interest, or a permanent establishment for which it is the main entity, has a top-up amount or an additional top-up amount.

(4)

Such an intermediate parent member is responsible for F4—

(a)

every permanent establishment for which it is the main entity, F5...

(b)

all of the members of the group it has an ownership interest in that are not located in the territory it is located in F6, and

(c)

every permanent establishment of a member of the group it has an ownership interest in other than a permanent establishment located in the territory it is located in.

(5)

A partially-owned parent member of a multinational group (see section 237(1)) that is located in a Pillar Two territory is a responsible member if it is subject to Pillar Two IIR tax and—

(a)

it is not wholly owned by another partially-owned parent member of that group that is subject to Pillar Two IIR tax, and

F7(b)

at least one member of the group in which it has an ownership interest, or a permanent establishment for which it is the main entity, has a top-up amount or an additional top-up amount.

(6)

Such a partially owned parent member is responsible for F8—

(a)

every permanent establishment for which it is the main entity, F9...

(b)

all of the members of the group it has an ownership interest in that are not located in the same territory it is located in F10, and

(c)

every permanent establishment of a member of the group it has an ownership interest in other than a permanent establishment located in the territory it is located in.

(7)

For the purposes of this Part an entity is subject to Pillar Two IIR tax F11for an accounting period if—

(a)

F12the period commences on or after 31 December 2023 and the entity is located in the United Kingdom and is not an excluded entity, or

(b)

the entity—

(i)

is located in another Pillar Two territory in which a tax equivalent to F13the IIR provisions of multinational top-up tax is in force F14for the period, and

(ii)

is not excluded from the application of that tax as a result of provision equivalent to section 127.

F15(7A)

If for an accounting period—

(a)

the application in relation to an entity located in a territory of a tax equivalent to the IIR provisions of multinational top-up tax depends on the making by any person of an election or claim, and

(b)

the tax does not apply in relation to the entity because such an election or claim is or is not made,

subsection (7)(b)(i) has effect in relation to the entity as though the tax were not in force in the territory for the period.

F16(8)

In this section the “IIR provisions of multinational top-up tax” means the provisions of this Part relating to the charging of top-up amounts and additional top-up amounts (but not untaxed amounts).

Annotations

Textual amendments

F1: Words in s. 128(2) substituted (with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 48(2)(a)(i)
F2: Words in s. 128(2) substituted (with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 48(2)(a)(ii)
F3: S. 128(3)(c) substituted (with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 4(2)
F4: Words in s. 128(4) inserted (with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 4(3)
F5: Word in s. 128(4)(a) omitted (with effect in accordance with Sch. 8 para. 53(5)-(13) of the amending Act) by virtue of Finance Act 2026 (c. 11), Sch. 8 paras. 2(a), 53(5)-(13)
F6: S. 128(4)(c) and word inserted (with effect in accordance with Sch. 8 para. 53(5)-(13) of the amending Act) by Finance Act 2026 (c. 11), Sch. 8 paras. 2(b), 53(5)-(13)
F7: S. 128(5)(b) substituted (with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 4(4)
F8: Words in s. 128(6) inserted (with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 4(5)
F9: Word in s. 128(6)(a) omitted (with effect in accordance with Sch. 8 para. 53(5)-(13) of the amending Act) by virtue of Finance Act 2026 (c. 11), Sch. 8 paras. 2(a), 53(5)-(13)
F10: S. 128(6)(c) and word inserted (with effect in accordance with Sch. 8 para. 53(5)-(13) of the amending Act) by Finance Act 2026 (c. 11), Sch. 8 paras. 2(b), 53(5)-(13)
F11: Words in s. 128(7) inserted (with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 48(2)(b)(i)
F12: Words in s. 128(7)(a) inserted (with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 48(2)(b)(ii)
F13: Words in s. 128(7)(b)(i) inserted (in relation to accounting periods commencing on or after 31.12.2024) by Finance Act 2025 (c. 8), Sch. 4 paras. 7(1)(a), 10
F14: Words in s. 128(7)(b)(i) inserted (with effect for accounting periods beginning on or after 31.12.2023 in accordance with Sch. 12 para. 1(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 12 para. 48(2)(b)(iii)
F15: S. 128(7A) inserted (in relation to accounting periods beginning on or after 31.12.2025) by Finance Act 2026 (c. 11), Sch. 8 paras. 4, 53(1)
F16: S. 128(8) inserted (in relation to accounting periods commencing on or after 31.12.2024) by Finance Act 2025 (c. 8), Sch. 4 paras. 7(1)(b), 10

Notes on Part 3

Modifications

C1: Pt. 3 modified (2.12.2025) by Finance Act 2026 (c. 11), Sch. 8 paras. 32, 53(3)