CTM80210 - Groups: group relief: non coinciding accounting periods or group relationships

ICTA88/S403A

Section 403A applies where an accounting period of a claimant or surrendering company ends on or after 2 July 1997. It limits the amount of group relief available if the surrendering and claimant companies do not have coincident accounting periods or are not members of the same group throughout an accounting period. The legislation works by looking at the ‘overlapping period’ which is common to the claimant and surrendering company.

Profits and losses are time apportioned to the overlapping period, unless this would lead to an unjust or unreasonable result ( CTM80260). The amount which can be surrendered or claimed is the smaller of:

• the ‘unused part of the surrenderable amount’ of the surrendering company, and
• the ‘unrelieved part’ of the claimant’s profits,
• • for the overlapping period.

More detailed guidance on the operation of Section 403A is at CTM80215.

Note that although the claimant and surrendering companies must be grouped throughout any overlapping accounting period, they need not be in a group relationship at the time the relief is claimed, see A W Chapman Ltd v Hennessey 55TC516.