Groups

Question 1

A group exists where:

Answer 1

One company is a 75% subsidiary of another company or

Both companies are 75% subsidiaries of a third company

Question 2

Group relief groups

Answer 2

One member of a group relief group can surrender qualifying losses to other group members of that group in any proportion it wishes

Losses cannot be surrendered to /from foreign companies but they can link UK companies

Question 3

CT: Group relief can be surrendered in respect of…

Answer 3

• trading losses
• deficit (ie net debit) on non trading loan relationships
• Excess qualifying charitable donations
• Excess property business losses

Question 4

CT: How to claim group relief

Answer 4

Group relief is obtained by setting off the loss of the surrendering company against the taxable total profits of the claimant company.

It is deducted after loss relief in respect of brought forward and current period losses, but before relief for losses carried back from a subsequent accounting period.

Question 5

CT Group relief: Which losses can be relieved?

Answer 5

Brought forward losses can be group relieved but losses carried back cannot be group relieved.

It is usual, particularly where there is a minority shareholder, for the claimant company to pay for group relief. Such payments up to a maximum of the loss surrendered are ignored for tax purposes.

Question 6

CT: Group relief for carried forward losses

Answer 6

Trading losses, property losses and non trading loan relationship deficits incurred post 1 April 2017 which are carried forward into an accounting period can now be surrendered to another group company through group relief.

Such a loss cannot be surrendered if the company could use the loss against its total profits in that period, but has not made a claim to use them.

A company cannot make a claim for group relief of carried forward losses of another company if it has any unused carried forward losses of its own.