CTM80310 - Groups: group relief: UK permanent establishment of non- resident company

ICTA88/S403D

From 1 April 2000, a non-resident company which is within the charge to CT (because it trades in the UK through a permanent establishment, CTM80150) can claim group relief ( CTM81500) against its chargeable profits from other group members and surrender trade losses, and other amounts ( CTM80345) relating to chargeable UK activities, to group members.

Where the permanent establishment is the surrendering company, there are conditions for and limitations on relief. These are:

• If tax relief for part of the loss etc. may be available in a foreign jurisdiction, then none of the loss can be surrendered as group relief - ICTA88/S403D (1)(c). Note that this is an all or nothing test. If any part of the loss attracts relief overseas, none of the loss is available for group relief in the UK. For further guidance about this condition see CTM80315.
• The loss or other amount must be attributable to activities carried on by the permanent establishment that are within the charge to CT. Amounts, which relate to activities which, if there were profits, would not be within the charge to CT are not eligible for relief - ICTA88/S403D (1)(a).
• Losses or other amounts attributable to an activity exempted from CT by a bilateral Double Tax Agreement cannot be surrendered. For further guidance about this condition see CTM80340.

For transitional provisions that apply to accounting periods straddling 1 April 2000 see CTM80370.