Commentary

D2.232 Interaction of group relief and consortium relief

Corporate tax
Corporate tax | Commentary

D2.232 Interaction of group relief and consortium relief

Corporate tax | Commentary

D2.232 Interaction of group relief and consortium relief

Priority of group and consortium relief

Where a company is owned by consortium companies but is also a member of a group, the basic premise is that group relief will take priority over consortium relief1.

Example 1

C Ltd is owned by A Ltd (75%) and B Ltd (25%).

As A Ltd owns 75% of C Ltd, there is a group of A Ltd and C Ltd, so group relief will apply. This will give A Ltd entitlement to all of C Ltd's losses. B Ltd will get nothing because group relief takes priority.

If the ownership of C Ltd was 74% (A Ltd) and 26% (B Ltd) this would be a consortium and consortium relief would apply, giving A Ltd entitlement to 74% of C Ltd's losses and B Ltd entitlement to 26% of C Ltd's loss; the additional 1% would make a great deal of difference to B Ltd.

Surrendering company is both owned by a consortium and is a member of a group

In some circumstances it is possible that the losses of a company that is both a company owned by a consortium and a member of a group could be surrendered as group relief to a group company as well as consortium relief under a consortium claim.

In such cases, it is assumed that any losses which could be group relieved are group relieved, when calculating the balance of the loss available for consortium relief (for this purpose it has to be assumed

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