CTM82510 - Corporation Tax: Group relief for carried-forward losses: Consortia: Conditions for a claim

CTA10/S188CB-CI

»Ê¹ÚÌåÓýapp claimant company may make a claim for relief in an accounting period (the claim period) for all or part of the surrenderable loss or other amounts of one or more surrendering companies if:

  • »Ê¹ÚÌåÓýapp surrendering company consents to the claim,
  • »Ê¹ÚÌåÓýappre is an overlapping period, and
  • One of the consortium conditions is met.

Consortium conditions

A claim for group relief for carried-forward losses in consortia can be made where the surrendering company and claimant company are both UK related and meet one of the four consortium conditions.

»Ê¹ÚÌåÓýappse conditions are that one of the companies is a company owned by the consortium, and the other company is either a member of the consortium or in the same group as a member of the consortium.

But the conditions are not met if a sale of shares in the consortium company by the member of the consortium would be a trading receipt of that member.

Members of the consortium and companies owned by a consortium have the same meaning as they do for group relief for consortia (CTA10/PART5) (CTM80530).

Condition 1

CTA10/S188CF

Consortium condition 1 is that the claimant company is a trading company or holding company owned by the consortium, including a 90% trading subsidiary of a holding company owned by the consortium (CTA10/S188FB-FC, CTA10/PART5/S153). »Ê¹ÚÌåÓýapp surrendering company is a member of the consortium.

Condition 2

CTA10/S188CG

Consortium condition 2 is that the claimant company is a trading company owned by the consortium or a holding company owned by the consortium which has a 90% trading subsidiary. »Ê¹ÚÌåÓýapp surrendering company is in the same group of companies as a member of the consortium (link company).

Condition 3

CTA10/S188CH

Consortium condition 3 is that the claimant company is a member of the consortium. »Ê¹ÚÌåÓýapp surrendering company is a trading company owned by the consortium or a holding company owned by the consortium which has a 90% trading subsidiary.

Condition 4

CTA10/S188CI

Consortium condition 4 is that the claimant company is in the same group of companies as a member of the consortium (link company). »Ê¹ÚÌåÓýapp surrendering company is a trading company owned by the consortium or a holding company owned by the consortium which has a 90% trading subsidiary.

CTA10/S188CJ

A company is UK related if it is:

  • A UK resident company, or
  • A non-UK resident company carrying on a trade in the UK through a permanent establishment.

Claimant company is company owned by the consortium

CTA10/S188CB, CTA10/S188CK

Where the claimant company is the consortium company (the company owned by the consortium (CTA10/S188FB, CTA10/PART5/S153)), consortium condition 1 or 2 must be met at some time during the overlapping period. »Ê¹ÚÌåÓýapp company can claim for losses or other amounts of the surrendering company which can be the consortium member or a member of the consortium member’s group.

Claimant company is member of consortium or in the same group as member of consortium

CTA10/S188CC, CTA10/S188CK

Where the claimant company is a member of the consortium or in the same group as a member of the consortium, condition 3 or 4 must be met throughout the period beginning before or during the accounting period in which the loss is incurred (loss-making period) and ending during or after the overlapping period (CTM82090).

»Ê¹ÚÌåÓýapp claimant company can only claim for losses or other amounts incurred by the surrendering company in periods in which condition 3 or 4 was met.