CTM80555 - Consortia: group relief: claim by company in consortium member’s group

ICTA88/S406 (1) to (4)

For the meaning of terms used in this paragraph see CTM80550 and for a diagram illustrating them see CTM80590.

A company (a 'group member') in the same group as a member of a consortium (a ‘link company’) may make a consortium claim in respect of the losses etc. of a company owned by the consortium (a 'consortium company'). This is subject to the following conditions and limitations.

• Disregarding any deficiency of the link company's profits, the link company itself must be able to make a consortium claim in respect of those losses (ICTA88/S406 (2)).
• For the purposes of determining the claimant’s share of the consortium member’s losses etc. under ICTA88/S403C (2) ( CTM80540), the ‘relevant fraction’ taken is that which the link company has in the consortium member.
• If the group member is not in a group relationship with the link company throughout the accounting period concerned then, for the purposes of apportionment under ICTA88/S403A ( CTM80215), only the period when the group member was in a group relationship with the link company can be part of an ‘overlapping period’ ( CTM80225). Any other periods are treated as not coinciding with any part of the accounting period of the surrendering company (ICTA88/S406 (3)).
• Where more than one claim is made, the maximum amount which all group members, including the link company, can claim in total is the amount which could have been claimed by the link company itself, if it had had sufficient profits - ICTA88/S406 (4).

Bear in mind that the rules about:

• apportionment of amounts to overlapping periods (CTM80215) in ICTA88/S403A,
• the amount of relief where group relief may be available from a fellow group member in addition to consortium relief in ICTA88/S405 ( CTM80580),

may apply as well as ICTA88/S406.

See the example at CTM80680.