Consortium relief

Produced by Tolley
Consortium relief

The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Consortium relief
  • Introduction
  • Definition
  • Illustration 1 ― consortium relationships
  • Available amounts
  • Deemed current year claim
  • Interaction with group relief
  • Illustration 2 ― interaction between group relief and consortium relief
  • Group consortium companies
  • Illustration 3 ― group consortium companies
    • More...

Introduction

Consortium relief enables losses of a consortium company to be transferred to consortium members in proportion to the consortium member’s interest in the consortium company, and vice versa. Consortium relief is a flexible relief which is available in several different scenarios which are discussed further below.

Prior to 1 April 2017 consortium relief was only available for current year losses. For losses arising after 1 April 2017 these rules have been relaxed and when post 1 April 2017 losses are carried forward most can be surrendered as consortium relief. These rules are similar to the consortium relief rules for current year losses set out below but there are several conditions and anti-avoidance provisions. For further details see the Consortium relief for carried-forward losses post 1 April 2017 guidance note.

Definition

A 'consortium company’ is a company, which is 75% owned by consortium members.

Consortium members are companies which own at least 5% of the consortium company.

Overseas companies are included when deciding whether there is a consortium relationship although they cannot receive or surrender losses for consortium relief.

Note that the amendments to the group relief rules as a result of the Marks & Spencer’s case do not apply to consortium relief ― see the Group relief and the Setting up overseas ― branch or subsidiary guidance notes for more commentary on loss relief for overseas subsidiaries.

Illustration 1 ― consortium relationships

Victoria Ltd is a consortium company, as 81% of its shares are owned by other companies who each own at least 5%.
Brooklyn Ltd is a consortium member because it owns at least 5%.
Romeo Inc is also a consortium member but as Romeo Inc is non-resident, no losses can be transferred to or from it.
Cruz Ltd is not a consortium member because it owns less than 5%.
Harper Seven Ltd is a consortium member because, again, it owns at least 5%.
Mr Beckham is not a consortium member because he is not a company.

The effect of consortium

Find Tax Guidance quickly and avoid undue risks.
TolleyGuidance gives you direct access to critical, comprehensive and up-to-date tax information and expertise you can rely on.
Read full article
Popular documents
LEXISNEXIS

Substantial shareholding exemption: overview

The substantial shareholding exemption (SSE) provides a complete exemption from the liability to corporation tax on the gains generated from qualifying disposals of shares and interests in shares by qualifying companies. Conversely, if losses are generated by the disposal and the SSE conditions are

LEXISNEXIS

Capital allowances on cars

Summary of capital allowances on carsThe current capital allowance rates applicable to cars are as follows:Pool typeDescription of carRateLegislationMain rate poolNew and unused cars with CO2 emissions over 50g/km but not more than 110g/km (to be reduced to 50g/km and below from April 2021)18%CAA

LEXISNEXIS

QIPs ― when do they apply?

This guidance note provides details of quarterly instalment payments (QIPs) for corporation tax purposes and which companies need to pay their tax liabilities in this manner.Generally, corporation tax is payable nine months and one day after the end of the relevant accounting period. However, large

LEXISNEXIS

VAT registration ― changing business details

This guidance note provides an overview of the steps businesses need to take if aspects of their business change, and as a result, they need to notify HMRC about the change.Changes to name and / or addressIf a business changes its name and / or its address then it is required to notify HMRC of the