CTM80105 - Groups: group relief: outline

ICTA88/S402

Group relief is a relief from CT. It allows:

  • the transfer of losses and certain other amounts (CTM80110),
  • between companies within the charge to CT (CTM81500),
  • which have the necessary group (CTM80150) or consortium (CTM80530) relationship.

Whilst group relief allows the transfer of losses between companies, it does not go so far as treating a group of companies as if it were a single company for tax purposes. That is, the detailed rules, about the amounts of losses, etc. which can be surrendered and claimed, fall short of full consolidation of each group company’s profits and losses into a single figure of profit or loss for the group as a whole.

The rules about which trading losses and other amounts may be surrendered are described at CTM80110. The company that transfers the losses, etc, is called the ‘surrendering company’. The company that claims the losses, etc, is called the ‘claimant company’.

It is not necessary that the surrendering company and the claimant company have the same accounting periods. Neither it is necessary for them to have had a group relationship throughout an accounting period. There are special rules for determining the amount of relief in these circumstances (CTM80210).

There are special rules which apply:

  • If there is the possibility of relief for the loss etc. being given in a jurisdiction other than the UK (CTM80315). These rules may apply to UK permanent establishments of companies resident outside the UK and overseas permanent establishments of UK resident companies.
  • If the loss arises to a 75% subsidiary resident in an European Economic Area territory (CTM80500 onwards).

Guidance about dual resident companies is at CTM34500 onwards.