CTM80520 - Consortia: group relief: claims: consent to be given

ICTA88/S412 (1), FA98/SCH18/PARA70 (2)

When any one of the members of a consortium makes a claim to consortium group relief, there must be consent to the claim by all the members of a consortium as well as the company owned by the consortium.

A 'member of the consortium' is a company that beneficially owns at least one-twentieth of the ordinary share capital ( CTM80530). The example that follows is about consent.

Example

Company Z has ordinary share capital of 100 £1 shares and its shareholders are:

G is an equal partnership between Company H and Company J, who are not connected.

Any claim by A in respect of Z's loss or other amount requires the consent of A, B, C, D and E but not of F or partnership G (or its partners). This is because neither F nor G partnership is a member of the consortium, as:

• F beneficially owns less than 5% of the ordinary share capital,

and

• the partners own the assets of G partnership. H beneficially owns 3% and so does J so neither owns 5% cent or more.

Consent must include that of any financial concern which is a member of the consortium, although such a company may not itself be entitled to group relief. The fact that a company that holds the shares of the surrendering or holding company on trading account is a member of the consortium does not preclude claims by the other companies.