In this example ICTA88/S410 (arrangement for transfer of company
to another group or consortium) and ICTA88/S413 (7) to (10)
(entitlement to profits and assets tests) do not apply.
H, a holding company, has the following trading
subsidiaries during the whole of the accounting period of 12 months
to 31 December 2001.
| Percentage of shares and entitlement to profits and to assets held by H | |
| Q | 100% |
| R | 95% |
| S | 85% |
| T | 90% |
During the same accounting period all the shares and
entitlements to profits and to assets in H are held equally by W,
X, Y and a bank, Z. Each of the four companies in the consortium
has ample profits to absorb any relief surrendered by the holding
company and its subsidiaries.
The accounts of the following companies for the 12 months to
31 December 2001 give results as follows.
| H | excess management expenses | £5,000 |
| Q | trading losses | £4,000 |
| R | trading losses | £6,000 |
| S | trading losses | £2,000 |
| T | trading losses | £1,000 |
All the companies, including Z, give consent to claims for consortium relief. The members of the consortium may then obtain consortium relief as follows.
W
| 25% of H's excess management expenses | £1,250 |
| 25% of Q's loss | £1,000 |
| 25% of R's loss | £1,500 |
| No relief in respect of S's loss (see below) | NIL |
| 25% of T's loss | £250 |
| Consortium relief | £4,000 |
X
| 25% of H's excess management expenses | £1,250 |
| 25% of Q's loss | £1,000 |
| 25% of R's loss | £1,500 |
| No relief in respect of S's loss (see below) | NIL |
| 25% of T's loss | £250 |
| Consortium relief | £4,000 |
Y
| 25% of H's excess management expenses | £1,250 |
| 25% of Q's loss | £1,000 |
| 25% of R's loss | £1,500 |
| No relief in respect of S's loss (see below) | NIL |
| 25% of T's loss | £250 |
| Consortium relief | £4,000 |
There is no relief due to any of the consortium members for S's
loss under ICTA88/S402 (3)(b) because S is not a 90% trading
subsidiary of H (
CTM80535).
Z is not entitled to any relief (ICTA88/S402 (4) -
CTM80530, sixth sub-paragraph) because a
profit on the sale of the shares it holds in H would be a trading
receipt.
The balance of losses and other amounts not surrendered may be carried forward by each company as follows.
| Company | H | Q | R | S | T |
| Excess management expenses | £5,000 | ||||
| Trading losses | £4,000 | £6,000 | £2,000 | £1,000 | |
| Less surrendered as group relief | £3,750 | £3,000 | £4,500 | £750 | |
| Carried forward | £1,250 | £1,000 | £1,500 | £2,000 | £250 |
