»Ê¹ÚÌåÓýapp

»Ê¹ÚÌåÓýapp percentages shown in the diagram indicate beneficial ownership of ordinary share capital and you should assume that the arrangements rules (CTA10/Ss146A, 146B, and 155) do not apply.

»Ê¹ÚÌåÓýapp votes and entitlement to profits and assets on winding up follow the shareholdings shown (see CTA10/Ss151(4) for the 75% subsidiary (CTM80535), and Ss143(3) and 144(3) for the ownership proportions of B and Y in O (CTM80540 and CTM80545)).

»Ê¹ÚÌåÓýapp facts

M is a company owned by a consortium, and C (50%) and Z (50%) are members of a consortium.

All companies make up accounts for the year to 31 December 2011. In that period:

M has incurred a trading loss of £10,000 and has chargeable gains of £5,000.

C has substantial profits.

Z has a loss.

Procedure

Were it not for CTA10/S147(3) (CTM80570), C could claim its half share (‘ownership proportion� CTM80540) of M’s trading loss as consortium relief, leaving the balance available for a claim under CTA10/S37 by M. So C would effectively obtain relief for the whole of M’s (net) losses rather than for its 50% share.

Under the rules in CTA10/S147 (3), for the purposes of C’s consortium claim, M’s losses are restricted by any claim under CTA10/S37 that could be made to set them off against total profits.

C’s consortium claim is thus limited to 50% x (£10,000 - £5,000) = £2,500.