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other amounts surrendered by the link company and group
companies.

(3) That limit is the same as the limit that, as a result of section 188DH(2),
would apply for the purposes of a consortium claim made by the
5claimant company for the claim period in relation to losses or other
amounts surrendered by the link company, assuming that the link
company was UK related.

(4) In determining the limit that would apply as a result of section
188DH(2) it is to be assumed that the accounting period of the link
10company is the same as the accounting period of the claimant
company.

(5) In this section—

  • “consortium claim” means a claim for group relief for carried-
    forward losses under section 188CB,

  • 15“group company” means a company that is a member of the
    same group of companies as the link company (other than the
    link company itself), and

  • UK related”, in relation to a company, has the meaning given
    by section 188CJ.

188DK 20 Condition 1 and 2: claimant company not controlled by surrendering
company etc

(1) This section applies if—

(a) the claimant company makes a claim under section 188CB for
group relief for carried-forward losses,

(b) 25the claim is based on consortium condition 1, and

(c) during any part of the overlapping period, arrangements
within subsection (3) are in place which enable a person to
prevent the surrendering company, either alone or together
with one or more other companies that are members of the
30consortium, from controlling the claimant company.

(2) This section also applies if—

(a) the claimant company makes a claim under section 188CB for
group relief for carried-forward losses,

(b) the claim is based on consortium condition 2, and

(c) 35during any part of the overlapping period, arrangements
within subsection (3) are in place which enable a person to
prevent the link company, either alone or together with one
or more other companies that are members of the
consortium, from controlling the claimant company.

(3) 40Arrangements are within this subsection if—

(a) the company, either alone or together with one or more other
companies that are members of the consortium, would
control the claimant company, but for the existence of the
arrangements, and

(b) 45the arrangements form part of a scheme the main purpose, or
one of the main purposes, of which is to enable the claimant
company to obtain a tax advantage under this Chapter.

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(4) The relief to be given on the claim is to be determined as if the
claimant company’s relevant maximum for the overlapping period
was 50% of what it would be but for this section (see section 188DD
to determine the claimant company’s relevant maximum for the
5overlapping period).

(5) In this section “the overlapping period” is to be read in accordance
with section 188DG

(6) Section 1139 (“tax advantage”) applies for the purposes of this
section.

188DL 10 Conditions 1 and 2: claimant company in group of companies

(1) This section applies if—

(a) the claimant company makes a claim under section 188CB
based on consortium condition 1 or 2, and

(b) the claimant company is a member of a group of companies.

(2) 15In determining the claimant company’s relevant maximum for the
overlapping period under section 188DD, the amount calculated at
step 1 of that section is to be treated as reduced (but not below nil) by
the group’s potential relief.

(3) The group’s potential relief is the sum of—

(a) 20the maximum amount of group relief for carried-forward
losses that could be claimed by the claimant company for the
claim period on claims under section 188CB based on the
group condition, and

(b) the maximum amount of group relief under Part 5 that could
25be claimed by the claimant company for the claim period on
claims under section 130 based on the group condition.

(4) Before determining the maximum amount of potential group relief
for carried-forward losses or potential group relief under subsection
(3) take account of any claim made before the claim mentioned in
30subsection (1) that—

(a) is a claim for group relief or group relief for carried-forward
losses based on the group condition made by another
member of the same group of companies as the claimant
company, and

(b) 35is in relation to losses or other amounts surrendered.

CHAPTER 5 Limitations on relief: claims under section 188CC
Introduction
188EA Overview of Chapter

40This Chapter sets out limitations on the amount of relief which may
be given on a claim under section 188CC.

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General limitation on amount of relief
188EB Limitation on amount of relief applying to all claims under section
188CC

(1) The amount of group relief for carried-forward losses to be given on
5a claim under section 188CC (“the current claim”) is limited to
whichever is the lesser of—

(a) the amount mentioned in subsection (2),

(b) the amount mentioned in subsection (3), and

(c) the amount mentioned in subsection (4).

(2) 10The amount referred to in subsection (1)(a) is the unused part of the
surrenderable amounts that are attributable to the specified loss-
making period (see section 188EC).

(3) The amount referred to in subsection (1)(b) is the difference
between—

(a) 15the claimant company’s relevant maximum for the
overlapping period (see section 188ED), and

(b) the amount of previously claimed group relief for carried-
forward losses for the overlapping period (see section
188EE).

(4) 20The amount referred to in subsection (1)(c) is the potential Part 5
group relief amount (see section 188EF).

188EC Unused part of surrenderable amounts attributable to specified loss-
making period

(1) The unused part of the surrenderable amounts that are attributable
25to the specified loss-making period is the amount equal to—

(a) the surrenderable amount for the overlapping period (see
subsection (2)), less

(b) the amount of prior surrenders for that period (see
subsections (3) to (5)).

(2) 30To determine the surrenderable amount for the overlapping
period—

(a) take the proportion of the surrender period included in the
overlapping period, and

(b) apply that proportion to the surrenderable amounts for the
35surrender period that are attributable to the specified loss-
making period.

The surrenderable amount for the overlapping period is the amount
given as a result of paragraph (b).

(3) To determine the amount of prior surrenders for the overlapping
40period—

(a) identify any prior claims for the purposes of this section (see
subsection (4)), and

(b) take the steps set out in subsection (5) in relation to each such
claim.

45The amount of prior surrenders for the overlapping period is the
total of the previously used amounts given at step 3 in subsection (5)
for all the prior claims.

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(4) A claim is a prior claim for the purposes of this section if—

(a) it is either—

(i) a claim under section 188CB by any company which
relates to the amounts to which the current claim
5relates (as well as any other amounts), or

(ii) a claim under section 188CC by any company which
relates to the same amounts to which the current
claim relates,

(b) it is made before the current claim, and

(c) 10it has not been withdrawn.

(5) These are the steps referred to in subsection (3)(b) to be taken in
relation to each prior claim.

Step 1

Identify the overlapping period for the prior claim.

15Step 2

Identify any period that is common to the overlapping period for the
current claim and the overlapping period for the prior claim.

If there is a common period, go to step 3.

If there is no common period, there is no previously used amount in
20relation to the prior claim (and ignore step 3).

Step 3

Determine the previously used amount of group relief for carried-
forward losses in relation to the prior claim (see subsections (6) to
(8)).

(6) 25To determine the previously used amount of group relief for carried-
forward losses in relation to a prior claim made under section
188CB

Step 1

Take the proportion of the overlapping period for the prior claim
30that is included in the common period identified at step 2 in
subsection (5) in relation to that claim.

Step 2

Apply that proportion to the amount of group relief for carried-
forward losses given on the claim.

35Step 3

Multiply the amount arrived at under step 2 by the fraction set out in
subsection (7).

(7) The fraction is—


40where—

  • A is the sum of the surrenderable amounts that are attributable
    to the specified loss-making period, and

  • B is the sum of all the surrenderable amounts.

(8) To determine the previously used amount of group relief for carried-
45forward losses in relation to a prior claim made under section
188CC

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(a) take the proportion of the overlapping period for the prior
claim that is included in the common period identified at step
2 in subsection (5) in relation to that claim, and

(b) apply that proportion to the amount of group relief for
5carried-forward losses given on the prior claim.

The previously used amount of group relief for carried-forward
losses in relation to the prior claim is the amount given as a result of
paragraph (b).

188ED Claimant company’s relevant maximum for the overlapping period

(1) 10The claimant company’s relevant maximum for the overlapping
period is determined as follows—

Step 1

Calculate the claimant company’s relevant maximum for the claim
period in accordance with section 269ZD(4).

15Step 2

Deduct from that amount the sum of—

  • any deductions made by the company for the claim period

    • “(i)

      under section 45(4)(b) or 45B(4), or

      (ii)

      under section 303B or 303D by virtue of section 304(5),

  • 20any deduction made by the company for the claim period
    under section 457(3) or 463H(5) of CTA 2009,

  • any deductions made by the company for the claim period
    under section 124(5), 124A(5) or 124C(6) of FA 2012, and

  • any deductions made by the company for the claim period
    25which are deductions within any of paragraphs (a) to (i) and
    (k) of section 269ZD(3).

Step 3

Take the proportion of the claim period included in the overlapping
period and apply that proportion to the amount arrived at under
30step 2.

(2) In step 2 of subsection (1)—

(a) in paragraph (a)(i), the references to deductions under
section 45(4)(b) or 45B(4) do not include deductions that
would be ignored for the purposes of section 269ZB by
35reason of—

(i) section 1209(3), 1210(5A) or 1211(7A) of CTA 2009
(losses of film trade),

(ii) section 1216DA(3), 1216DB(5A) or 1216DC(7A) of
that Act (losses of television programme trade),

(iii) 40section 1217DA(3), 1217DB(5A) or 1217DC(7A) of
that Act (losses of video game trade),

(iv) section 1217MA(3) or 1217MC(9) of that Act (losses of
theatrical trade),

(v) section 1217SA(3) or 1217SC(9) of that Act (losses of
45orchestral trade),

(vi) section 1218ZDA(3) or 1218ZDC(9) of that Act (losses
of museum or gallery exhibition trade),

(vii) section 65(4B) or 67A(5A) (losses of UK or EEA
furnished holiday lettings business),

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(viii) section 269ZJ(1) (insurance companies: shock losses),

(ix) section 304(7) (certain losses of ring fence trades), or

(x) section 356NJ(2) (pre-1 April 2017 loss arising from oil
contractor activities);

(b) 5in paragraph (b) the reference to a deduction under section
463H(5) does not include the deduction of a shock loss.

(3) If the amount of the claimant company’s relevant profits for the
claim period (calculated in accordance with section 269ZD(5)) is less
than the amount of the claimant company’s deductions allowance
10for the claim period (determined in accordance with section
269ZD(6)), subsection (1) has effect as if step 1 was modified as
follows—

Step 1

Calculate the claimant company’s relevant profits for the claim
15period in accordance with section 269ZD(5).

(4) If section 269ZD has effect in relation to the claimant company for the
claim period with the modifications set out in section 269ZE(1)
(special loss cap for insurance companies in certain cases), subsection
(1) has effect as if steps 1 and 2 were modified as follows—

20Step 1

Determine, in accordance with section 269ZE(5), the modified loss
cap for the claimant company and the claim period.

Step 2

Reduce that amount by the total of any deductions made by the
25claimant company for the claim period which are deductions within
any of paragraphs (a) to (i) and (k) of section 269ZD(3).

(5) Subsection (2) is to be ignored if subsection (4) applies.

188EE Previously claimed group relief for carried-forward losses

(1) To determine the amount of previously claimed group relief for
30carried-forward losses for the overlapping period—

(a) identify any prior claims for the purposes of this section (see
subsection (2)), and

(b) take the steps set out in subsection (3) in relation to each such
claim.

35The amount of previously claimed group relief for carried-forward
losses for the overlapping period is the total of the previously
claimed amounts given at step 3 in subsection (3) for all the prior
claims.

(2) A claim is a prior claim for the purposes of this section if—

(a) 40it is a claim under section 188CB or 188CC by the claimant
company for group relief for carried-forward losses which
would be given by way of a deduction from the company’s
total profits of the claim period,

(b) it is made before the current claim, and

(c) 45it has not been withdrawn.

(3) These are the steps referred to in subsection (1)(b) to be taken in
relation to each prior claim.

Step 1

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Identify the overlapping period for the prior claim.

Step 2

Identify any period that is common to the overlapping period for the
current claim and the overlapping period for the prior claim.

5If there is a common period, go to Step 3.

If there is no common period, there is no previously claimed amount
in relation to the prior claim (and ignore step 3).

Step 3

Determine the previously claimed amount of group relief for carried
10forward losses in relation to the prior claim (see subsection (4)).

(4) To determine the previously claimed amount of group relief for
carried-forward losses in relation to a prior claim—

(a) take the proportion of the overlapping period for the prior
claim that is included in the common period identified at step
152 in subsection (3) in relation to that claim, and

(b) apply that proportion to the amount of group relief for
carried-forward losses given on the prior claim.

The previously claimed amount of group relief for carried-forward
losses in relation to the prior claim is the amount given as a result of
20paragraph (b).

188EF The potential Part 5 group relief amount

(1) The potential Part 5 group relief amount is determined as follows—

Step 1

Calculate the maximum amount of group relief that could have been
25given to the claimant company under Part 5 in relation to losses or
other amounts within section 99(1) which the surrendering company
had for the specified loss-making period.

In applying this step, ignore any lack of profits of the claimant
company from which deductions could have been made as
30mentioned in section 137(1).

Step 2

Deduct from the amount arrived at under step 1 the amount of any
group relief actually given to the claimant company under Part 5 in
relation to losses or other amounts within section 99(1) which the
35surrendering company had for the specified loss-making period.

Step 3

Multiply the amount arrived at following step 2 by the fraction in
subsection (2).

Step 4

40Deduct from the amount arrived at following step 3 any group relief
for carried-forward losses previously given to the claimant company
on claims under section 188CC which are related to the current claim.

(2) The fraction referred to in step 3 is—

45where—

  • A is the sum of the losses or other amounts within section
    99(1)(a), (c), (e), (f) and (g) which the surrendering company
    had for the specified loss-making period, and

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  • B is the sum of the losses or other amounts within section 99(1)
    (a) to (g) which the surrendering company had for the
    specified loss-making period.

(3) References in subsection (2) to losses or other amounts are references
5to losses or other amounts only in so far as they were eligible for
surrender under Chapter 2 of Part 5.

(4) A claim under section 188CC is related to the current claim if the
surrendering company and the specified loss-making period are the
same in relation to both claims.

188EG 10 Sections 188EC to 188EE: supplementary

(1) If two or more claims for group relief for carried-forward losses are
made at the same time, for the purpose of section 188EC and 188EE
treat the claims as made—

(a) in such order as the company making them may elect or the
15companies making them may jointly elect, or

(b) if no such election is made, in such order as an officer of
Revenue and Customs may direct.

(2) For the purpose of step 3 in each of sections 188EC(5) and 188EE(3)
the amount of group relief for carried-forward losses given on a prior
20claim is determined on the basis that relief is given on the claim
before it is given on any later claim.

(3) If the use of any proportion mentioned in subsection (4), would, in
the circumstances of a particular case, produce a result that is unjust
or unreasonable, the proportion is to be modified so far as necessary
25to produce a result that is just and reasonable.

(4) The proportions are those found in—

(a) section 188EC(2)(a),

(b) step 1 in section 188EC(6),

(c) section 188EC(8)(a),

(d) 30step 3 in section 188ED(1), and

(e) section 188EE(4)(a).

188EH Sections 188EC and 188EE: meaning of “the overlapping period”

(1) In sections 188EC and 188EE “the overlapping period”, in relation to
a claim for group relief for carried-forward losses, means the period
35that is common to the claim period and the surrender period (see
Requirement 2 in section 188CB(3) and Requirement 2 in section
188CC(3)).

(2) But if during any part of the overlapping period the relief condition
is not met, that part is treated as not forming part of the overlapping
40period but instead as forming—

(a) a part of the surrender period that is not included in the
overlapping period, and

(b) a part of the claim period that is not included in the
overlapping period.

(3) 45The relief condition is the condition on which the claim for group
relief for carried forward losses is based, that is—

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  • the group condition,

  • consortium condition 1,

  • consortium condition 2,

  • consortium condition 3, or

  • 5consortium condition 4.

Further limitations on amount of relief that apply in particular cases
188EI Condition 4: companies in link company’s group

(1) Where—

(a) the claimant company makes a claim under section 188CC,
10and

(b) the claim is based on consortium condition 4

the amount of relief to be given on the claim is limited by subsections
(2) and (3).

(2) There is a limit on the amount of group relief for carried-forward
15losses that can be given, in total, on relevant consortium claims made
by the link company and group companies.

(3) That limit is the maximum amount of group relief for carried-
forward losses that could be given to the link company on relevant
consortium claims—

(a) 20assuming that no relevant consortium claims were made by
group companies based on consortium condition 4,

(b) assuming that the link company was UK related, and

(c) ignoring any lack of profits of the link company from which
deductions could be made as mentioned in section 188CK(1).

(4) 25In this section—

  • “consortium claim” means a claim made under section 188CC
    for group relief for carried-forward losses,

  • “group company” means a company that is a member of the
    same group of companies as the link company (other than the
    30link company),

  • “relevant consortium claim” means a consortium claim in
    relation to which the surrendering company, the surrender
    period and the specified loss-making period are the same as
    is the case for the claim mentioned in subsection (1), and

  • 35UK related”, in relation to a company, has the meaning given
    by section 188CJ.

188EJ Conditions 3 or 4: surrendering company not controlled by claimant
company etc

(1) This section applies if—

(a) 40the claimant company makes a claim under section 188CC for
group relief for carried-forward losses,

(b) the claim is based on consortium condition 3, and

(c) during any part of the overlapping period, arrangements
within subsection (3) are in place which enable a person to
45prevent the claimant company, either alone or together with

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one or more other companies that are members of the
consortium, from controlling the surrendering company.

(2) This section also applies if—

(a) the claimant company makes a claim under section 188CC for
5group relief for carried-forward losses,

(b) the claim is based on consortium condition 4, and

(c) during any part of the overlapping period, arrangements
within subsection (3) are in place which enable a person to
prevent the link company, either alone or together with one
10or more other companies that are members of the
consortium, from controlling the surrendering company.

(3) Arrangements are within this subsection if—

(a) the company, either alone or together with one or more other
companies that are members of the consortium, would
15control the surrendering company, but for the existence of
the arrangements, and

(b) the arrangements form part of a scheme the main purpose, or
one of the main purposes, of which is to enable the claimant
company to obtain a tax advantage under this Chapter.

(4) 20The relief to be given on the claim is to be determined as if the
surrenderable amount for the overlapping period were 50% of what
it would be but for this section (see section 188EC(2) to determine the
surrenderable amount for the overlapping period).

(5) In this section “the overlapping period” is to be read in accordance
25with section 188EH.

(6) Section 1139 (“tax advantage”) applies for the purposes of this
section.

188EK Conditions 3 or 4: surrendering company in group of companies

(1) This section applies if—

(a) 30the claimant company makes a claim under section 188CC for
group relief for carried-forward losses, and

(b) the surrendering company is a member of a group of
companies.

(2) The surrendering company’s surrenderable amounts for the
35surrender period that are attributable to the specified loss-making
period are to be treated as reduced (but not below nil) by the relevant
amount.

(3) To determine the relevant amount—

Step 1

40Calculate the group’s potential relief.

Step 2

Multiply the amount arrived at under step 1 by the fraction set out in
subsection (6).

(4) The group’s potential relief is the maximum amount of group relief
45for carried-forward losses that could be given if every claim that
could be made based on the group condition in respect of the
surrenderable amounts for the surrender period was in fact made