Commentary

D1.752 Impairment relief for loan relationships—Consortium relief

Corporate tax
Corporate tax | Commentary

D1.752 Impairment relief for loan relationships—Consortium relief

Corporate tax | Commentary

D1.752 Impairment relief for loan relationships—Consortium relief

The relationship between a company owned by a consortium (a consortium company, C Ltd) and a member of the consortium (M Ltd) does not constitute control1 and so does not in itself cause the two companies to be connected parties so as to refuse relief for impairment losses. (For the meaning of a consortium company and a member of a consortium, see D2.207A.)

However, where relief for trading losses is surrendered by one such company to the other (consortium relief, see D2.230), there may be a restriction of either the relief available in respect of impairment losses (previously, bad debts) or consortium relief in the circumstances described in 1–4 below3.

The rules apply4:

  1.  

    •     where a debit for an impairment loss or the release by the lender of all or part of an amount is due under the terms of a loan relationship has been

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