CTM80620 - Consortia: group relief: enabling arrangements

'Enabling' arrangements CTM80605 are usually (though not invariably) in written form and binding on the parties. Such arrangements exist even though it may be stipulated that they are not operable until a specific date. This specific date may be after the end of the accounting period to which the group relief claim relates. This follows from the words 'or after the expiry of that accounting period' in ICTA88/S410 (2)(b).

There may be conditions in the Articles of Association of a company owned by a consortium, or in a joint venture agreement between the consortium members, designed to deal with various eventualities. Examples of such eventualities are:

• a member wishing to leave the consortium,
• the change in control of a member,
• the liquidation of a member.

These conditions may amount to arrangements within ICTA88/S410 (2)(b). ,However, ESCC10 ensures that they will not fall foul of the legislation, provided they:

• are of a normal commercial character,

and

• cannot be used for avoidance purposes.