CTM80585 - Consortia: group relief: group and consortium claims both possible: claimant company is a group/consortium company

ICTA88/S405 (1) and (4) to (6)

A company which is both a member of a group and a company owned by a consortium ( CTM80530) is referred to as a 'group/consortium company' (ICTA88/S413 (2)). See CTM80590 for a diagram showing the meaning of this term.

As well as the restriction on the amount of losses etc. that a group/consortium company can surrender as consortium relief ( CTM80580), there is also a restriction on the amount of consortium relief that a group/consortium company can claim if it could also potentially claim to group relief from a fellow group company - ICTA88/S405 (4).

The legislation works works by:

• reducing the total profits of the group/consortium company against which consortium relief can be claimed - Section 405 (4),
• by the amount of any group relief which it could potentially claim from fellow group companies - Section 405 (5),
• after taking into account of any group claims actually made by other rmembers of the group/consortium company’s group - Section 405 (6).

See the examples at CTM80680 and CTM80695.

Note also that:

• where a company claims consortium or group relief, and
• it also has other amounts eligible for relief, such as trading losses available for claim under ICTA88/S393A,
• which are not reliefs from a later accounting period,

these potential or actual reliefs must also be taken account of in working out its total profits against which a consortium claim can be made. This is because those total profits against are calculated net of current period reliefs - ICTA88/S407 (1) ( CTM80400).

Where the surrendering company is a group/consortium company see CTM80580.