Commentary

D2.215 Group relief of current year losses—maximum relief calculation

Corporate tax
Corporate tax | Commentary

D2.215 Group relief of current year losses—maximum relief calculation

Corporate tax | Commentary

Group relief—calculation for group members

D2.215 Group relief of current year losses—maximum relief calculation

Maximum claim for group relief

The maximum group relief for current year losses is for the lower of:

  1.  

    •     the available loss of the surrendering company, and

  2.  

    •     the total profits of the claimant company (or companies)

This is subject to the restriction that applies where the claimant company and the surrendering company accounting periods do not coincide (D2.216).

The claimant company must use the losses in its current accounting period — any losses claimed under group relief cannot be carried back, carried forward or given to another group member.

Example 1

A Ltd and B Ltd are group companies with the following results for the year to 31 December.

A Ltd: Profit of £100,000
B Ltd: Loss of £60,000

It is possible to surrender the loss of £60,000 from B Ltd to A Ltd reducing A Ltd's taxable profit and its corporation tax liability.

Example 2

A Ltd and B Ltd are group companies with the following results for the year to 31 December.

A Ltd: Loss of £100,000
B Ltd: Profit of £60,000

The group relief claim here will be a maximum of £60,000. A Ltd will have the remaining loss of £40,000 which it may be able to set off in the current year, carry back, or

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