Group relief

Question 1

What are the group relief rules to the surrendering company?

Answer 1

Any amount of CURRENT year
- trading loss or 
- debits on non trading loan relationships
plus excess
- QCD relief
- UK property losses
- expenses of management 

can surrender BROUGHT FORWARD:
- trading losses 
- NTLR deficits
- UK property losses
expenses of management 

The surrendering company can only surrender to the extent it cannot use the above against its own total profits

Question 2

What are the group relief rules to the claimant company?

Answer 2

Maximum claim:
TTP X
Less: current year losses. (X)

• TTP is after deduction of losses b/f and QCD’s
• The company’s own losses are taken into account in computing the maximum claim, but need not actually be claimed before group relief

Question 3

What is the due date for a group relief claim?

Answer 3

12 months after the claimant company’s filing date for the AP covered by the claim (i.e. usually 2 years after the end of the AP)

Question 4

What is the payment for group relief?

Answer 4

The claimant company may pay the surrendering company for the loss
Any such payment for the group relief is ignored in both companies CT computations

Question 5

What things are there to look out for in a group relief question?

Answer 5

• Group relief is restricted to common accounting periods (profits and losses deemed to accrue evenly)
• Companies joining a group
  Group relief only available for losses arising whilst in the group
  Losses arising in a subsidiary prior to joining the group are not available for group relief for 5 years after joining
• Companies leaving a group
  No group relief once arrangements for sale are in place

Question 6

What is a consortium company?

Answer 6

Consortium is when two or more companies own at least 75% of the company combined:
Individually at least 5%
But no one company owns more than 75%

UK companies only can claim the relief, but overseas company can help to meet the definition

Question 7

What the consortium relief?

Answer 7

It is similar to group relief but

Losses to surrender
- between consortium company and UK members only
= Lower of:
Member’s TTP / loss
(Member’s % holding in CC ) x CC’s TTP/loss