CTM81605 - Groups: group relief: surrendering
company not UK resident: claims in respect of overseas losses of
non resident companies: enquiries
FA98/SCH18/PARA77
Special rules apply when an enquiry is made into a loss
surrendered by way of group relief under ICTA88/S403F from a 75%
subsidiary resident in another European Economic Area (EEA)
territory.
If an enquiry is opened, under the usual enquiry powers
(EM2216) HMRC is entitled to ask for any documents in the
company’s possession and any information that is reasonable
for the purposes of an enquiry.
Where the enquiry concerns a surrender of group relief from a
subsidiary resident in another EEA territory, we can ask the
claimant company for information explaining how
the EEA amount meets all the relevant conditions, and details of
the recalculation.
The following are examples of some of the types of evidence
that we might request from a claimant company to prove that any
loss is unrelievable:
- Documentary proof of the loss by way of
audited company accounts and tax computations. The claimant company
may also be required to demonstrate in which deemed accounting
period the loss was incurred and what type of loss it was.
- Documentary proof of all attempts made to
get relief for the loss, i.e. claims made to the national revenue
authorities, whether under statutory provisions or by way of a
discrete agreement in the State of residence, for the transfer of
the loss between companies in the State of residence.
- Board minutes/reports and all internal
correspondence which would evidence the fact that the loss making
company has considered and exhausted all possibilities to get
relief for the loss.
- Documentary evidence (board
minutes/directors reports etc) of all and any attempts to sell the
loss-making company to a third party.
