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What can be transferred between group members?

Source: HM Revenue & Customs | | 11/11/2021

Corporation Tax relief may be available when a company or organisation makes a trading loss. Companies that are eligible for group relief can transfer losses and certain other deficits to companies within the same group by means of Group or Consortium Relief. The use of group relief allows losses arising in the accounting period to be surrendered to a group company for that period. 

Companies attempting to either surrender or claim losses for Group Relief or Group Relief for carried forward losses, must meet the required conditions. For companies to be members of the same group, one company must be a 75% subsidiary of the other, or both must be 75% subsidiaries of a third company. The definition of ‘75% subsidiary’ requires one company to have direct or indirect beneficial ownership of at least 75% of the ordinary share capital in another. There are also further qualifying tests that may apply for group relief purposes, and this can be a complex area. 

Under Section 99 - Corporation tax Act 2010 the following losses (when qualifying) can be surrendered and claimed as group relief:

  • a trading loss 
  • a capital allowances excess 
  • non-trading deficit on loan relationship 
  • amounts allowable as qualifying charitable donations 
  • a UK property business loss 
  • management expenses 
  • a non-trading loss on intangible fixed assets 
 

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McAllisters is a partnership trading from Paxton House, 11 Woodside Crescent, Glasgow providing accountancy and tax services and general business advice and is a member of ICAS (Registration No 0342) and an FCA exempt professional firm (No 301235). Its VAT number is 261 3019 94

McAllisters (Scotland) Ltd is a related business providing tax and business advisory services to McAllisters and its clients. McAllisters (Scotland) Ltd is registered in Scotland (Registration number SC146856). Its VAT number is 624 0564 62.

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