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Corporation Tax Bill


Corporation Tax Bill
Part 5 — Group relief
Chapter 4 — Claims for group relief

74

 

(5)   

The deductions within this subsection are deductions for relief—

(a)   

under section 37 in relation to a loss made in an accounting period after

the claim period,

(b)   

under section 260(3) of CAA 2001 in relation to capital allowances for

an accounting period after the claim period, and

5

(c)   

under section 389 or 459 of CTA 2009 in relation to a deficit for a deficit

period after the claim period.

(6)   

For the purposes of subsection (4)(b) it is to be assumed that the claimant

company has claimed all relief available to it for the claim period under section

37 of this Act or section 260(3) of CAA 2001.

10

(7)   

Corporation tax relief is not to be given more than once for the same amount,

whether—

(a)   

by giving group relief and by giving some other relief (for any

accounting period) to the surrendering company, or

(b)   

by giving group relief more than once.

15

General limitation on amount of group relief to be given

138     

Limitation on amount of group relief applying to all claims

The amount of group relief to be given on a claim (“the current claim”) is

limited to—

(a)   

the unused part of the surrenderable amounts (see section 139), or

20

(b)   

if less, the unrelieved part of the claimant company’s available total

profits of the claim period (see section 140).

139     

Unused part of the surrenderable amounts

(1)   

The unused part of the surrenderable amounts is the amount equal to—

(a)   

the surrenderable amount for the overlapping period (see subsection

25

(2)), less

(b)   

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

(5)).

(2)   

To determine the surrenderable amount for the overlapping period—

(a)   

take the proportion of the surrender period included in the overlapping

30

period, and

(b)   

apply that proportion to the surrenderable amounts for the surrender

period.

   

The surrenderable amount for the overlapping period is the amount given as a

result of paragraph (b).

35

(3)   

To determine the amount of prior surrenders for the overlapping period—

(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.

   

The amount of prior surrenders for the overlapping period is the total of the

40

previously used amounts given at Step 3 in subsection (5) for all the prior

claims.

(4)   

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

 
 

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Part 5 — Group relief
Chapter 4 — Claims for group relief

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(a)   

it is a claim by any company for group relief in respect of the whole or

a part of the amounts that, in relation to the current claim, are the

surrendering company’s surrenderable amounts for the surrender

period,

(b)   

it is made before the current claim, and

5

(c)   

it 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.

10

Step 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 relation to

15

the prior claim (and ignore Step 3).

Step 3

   

Determine the previously used amount of group relief in relation to the prior

claim (see subsection (6)).

(6)   

To determine the previously used amount of group relief in relation to a prior

20

claim—

(a)   

take the proportion of the overlapping period for the prior claim that is

included in the common period identified at Step 2 in relation to that

claim, and

(b)   

apply that proportion to the amount of group relief given on the prior

25

claim.

   

The previously used amount of group relief in relation to the prior claim is the

amount given as a result of paragraph (b).

(7)   

For the meaning of “the overlapping period” see section 142.

140     

Unrelieved part of claimant company’s available total profits

30

(1)   

The unrelieved part of the claimant company’s available total profits of the

claim period is the amount equal to—

(a)   

the company’s available total profits for the overlapping period (see

subsection (2)), less

(b)   

the amount of previously claimed group relief for that period (see

35

subsection (3)).

(2)   

To determine the available total profits for the overlapping period—

(a)   

take the proportion of the claim period included in the overlapping

period, and

(b)   

apply that proportion to the available total profits of the claim period.

40

   

The available total profits for the overlapping period is the amount given as a

result of paragraph (b).

(3)   

To determine the amount of previously claimed group relief for the

overlapping period—

 
 

Corporation Tax Bill
Part 5 — Group relief
Chapter 4 — Claims for group relief

76

 

(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.

   

The amount of previously claimed group relief for the overlapping period is

the total of the previously claimed amounts given at Step 3 in subsection (5) for

5

all the prior claims.

(4)   

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

(a)   

it is a claim by the claimant company for group relief which would be

given by way of a deduction from the company’s total profits of the

claim period,

10

(b)   

it is made before the current claim, and

(c)   

it 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

15

   

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.

   

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

20

   

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 in relation to the

prior claim (see subsection (6)).

25

(6)   

To determine the previously claimed amount of group relief 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 2 in relation to that

claim, and

30

(b)   

apply that proportion to the amount of group relief given on the prior

claim.

   

The previously claimed amount of group relief in relation to the prior claim is

the amount given as a result of paragraph (b).

(7)   

In this section references to the claimant company’s “available total profits” are

35

references to its total profits after the deductions mentioned in section

137(4)(b).

(8)   

Further, if the claimant company is non-UK resident its available total profits

do not include any part of its total profits that arise from activities that are

double taxation exempt for the claim period (see section 186) (so far as those

40

profits are not covered by the deductions mentioned in section 137(4)(b)).

(9)   

For the meaning of “the overlapping period” see section 142.

 
 

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Part 5 — Group relief
Chapter 4 — Claims for group relief

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141     

Sections 139 and 140: supplementary

(1)   

If two or more claims for group relief are made at the same time, for the

purposes of sections 139 and 140 treat the claims as made—

(a)   

in such order as the company making them may elect or the companies

making them may jointly elect, or

5

(b)   

if no such election is made, in such order as an officer of Revenue and

Customs may direct.

(2)   

For the purposes of Step 3 in subsection (5) of each of sections 139 and 140 the

amount of group relief given on a prior claim is determined on the basis that

relief is given on the claim before it is given on any later claim.

10

(3)   

If the use of the proportion mentioned in section 139(2) or (6), or in section

140(2) or (6), 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 to produce a result that is just and reasonable.

142     

Meaning of “the overlapping period”

15

(1)   

In sections 139 and 140 “the overlapping period”, in relation to a claim for

group relief, means the period that is common to the claim period and the

surrender period (see Requirement 2 in section 130(2) or, as the case may be,

section 135(2)).

(2)   

But if during any part of the overlapping period the group relief condition is

20

not met, that part is treated as not forming part of the overlapping period 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.

25

(3)   

The group relief condition is the condition on which the claim for group relief

is based, that is—

   

the group condition,

   

consortium condition 1,

   

consortium condition 2,

30

   

consortium condition 3, or

   

the EEA group condition.

Limitations on group relief if claim based on consortium condition 1, 2 or 3

143     

Condition 1: surrendering company owned by consortium

(1)   

This section applies if—

35

(a)   

the claimant company makes a claim for group relief based on

consortium condition 1, and

(b)   

it is the surrendering company that is owned by the consortium.

(2)   

The group relief to be given on the claim is limited to the ownership proportion

of the surrenderable amount for the overlapping period (see section 139(2) to

40

determine the surrenderable amount for the overlapping period).

(3)   

The ownership proportion is the same as the lowest of the following

proportions—

 
 

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Part 5 — Group relief
Chapter 4 — Claims for group relief

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(a)   

the proportion of the ordinary share capital of the surrendering

company that is beneficially owned by the claimant company,

(b)   

the proportion of any profits available for distribution to equity holders

of the surrendering company to which the claimant company is

beneficially entitled (see Chapter 6), and

5

(c)   

the proportion of any assets of the surrendering company available for

distribution to such equity holders on a winding up to which the

claimant company would be beneficially entitled (see Chapter 6).

(4)   

For the purposes of subsection (3)—

(a)   

the proportions mentioned in paragraphs (a) to (c) of that subsection

10

are those prevailing during the overlapping period, and

(b)   

if any of those proportions changes during that period, use the average

of that proportion during that period.

(5)   

If the surrendering company is owned by the consortium as a result of section

153(3) (consortiums involving holding companies), references in subsection (3)

15

to the surrendering company are to be read as references to the holding

company in question.

(6)   

In this section “the overlapping period” is to be read in accordance with section

142.

144     

Condition 1: claimant company owned by consortium

20

(1)   

This section applies if—

(a)   

the claimant company makes a claim for group relief based on

consortium condition 1, and

(b)   

it is the claimant company that is owned by the consortium.

(2)   

The group relief to be given on the claim is limited to the ownership proportion

25

of the claimant company’s total profits of the overlapping period (see section

140(2) to determine the total profits of the overlapping period).

(3)   

The ownership proportion is the same as the lowest of the following

proportions—

(a)   

the proportion of the ordinary share capital of the claimant company

30

that is beneficially owned by the surrendering company,

(b)   

the proportion of any profits available for distribution to equity holders

of the claimant company to which the surrendering company is

beneficially entitled (see Chapter 6), and

(c)   

the proportion of any assets of the claimant company available for

35

distribution to such equity holders on a winding up to which the

surrendering company would be beneficially entitled (see Chapter 6).

(4)   

For the purposes of subsection (3)—

(a)   

the proportions mentioned in paragraphs (a) to (c) of that subsection

are those prevailing during the overlapping period, and

40

(b)   

if any of those proportions changes during that period, use the average

of that proportion during that period.

(5)   

If the claimant company is owned by the consortium as a result of section

153(3) (consortiums involving holding companies), references in subsection (3)

to the claimant company are to be read as references to the holding company

45

in question.

 
 

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Part 5 — Group relief
Chapter 4 — Claims for group relief

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(6)   

In this section “the overlapping period” is to be read in accordance with section

142.

145     

Conditions 2 and 3: limitations in sections 143 and 144

(1)   

This section applies if the claimant company makes a claim for group relief

based on consortium condition 2 or consortium condition 3.

5

(2)   

If the claim is based on consortium condition 2, the limitation on group relief

in section 143(2) applies in relation to the claim, but for this purpose references

in section 143(3) to the claimant company are to be read as references to the link

company.

(3)   

If the claim is based on consortium condition 3, the limitation on group relief

10

in section 144(2) applies in relation to the claim, but for this purpose references

in section 144(3) to the surrendering company are to be read as references to the

link company.

146     

Conditions 2 and 3: companies in link company’s group

(1)   

If the claimant company makes a claim for group relief based on consortium

15

condition 2, the amount of group 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 that can be given, in total, on

consortium claims made by the link company and group companies in relation

to the surrendering company’s surrenderable amounts for the surrender

20

period.

(3)   

That limit is the maximum amount of group relief that could be given to the

link company in relation to those amounts on consortium claims—

(a)   

assuming that no consortium claims in relation to those amounts were

made by group companies based on consortium condition 2, and

25

(b)   

ignoring any lack of profits of the link company from which deductions

could be made as mentioned in section 137(1).

(4)   

If the claimant company makes a claim for group relief based on consortium

condition 3, the amount of group relief to be given on the claim is limited by

subsections (5) to (7).

30

(5)   

There is a limit on the amount of group relief that can be given, in total, to the

claimant company for the claim period on consortium claims made in relation

to losses and other amounts surrendered by the link company and group

companies.

(6)   

That limit is the same as the limit that, as a result of section 144(2), would apply

35

for the purposes of a consortium claim made by the claimant company for the

claim period in relation to losses or other amounts surrendered by the link

company.

(7)   

In determining the limit that would apply as a result of section 144(2) it is to be

assumed that the accounting period of the link company is the same as the

40

accounting period of the claimant company.

(8)   

In this section—

“consortium claim” means a claim for group relief based on consortium

condition 1, consortium condition 2 or consortium condition 3, and

 
 

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Part 5 — Group relief
Chapter 4 — Claims for group relief

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“group company”, for the purpose of determining in accordance with this

section a limitation on the amount of group relief to be given on a claim

based on consortium condition 2 or consortium condition 3, means a

company that is a member of the same group of companies as the link

company (other than the link company itself).

5

147     

Conditions 1 and 2: surrenderable amounts including trading loss

(1)   

This section applies if—

(a)   

the claimant company makes a claim for group relief based on

consortium condition 1,

(b)   

it is the surrendering company that is owned by the consortium,

10

(c)   

the surrendering company’s surrenderable amounts for the surrender

period include a loss within section 99(1)(a), and

(d)   

the surrendering company has profits (of any description) of that

period from which the loss could be deducted under section 37.

(2)   

This section also applies if—

15

(a)   

the claimant company makes a claim for group relief based on

consortium condition 2,

(b)   

the surrendering company’s surrenderable amounts for the surrender

period include a loss within section 99(1)(a), and

(c)   

the surrendering company has profits (of any description) of that

20

period from which the loss could be deducted under section 37.

(3)   

The amount of group relief to be given on the claim is to be determined on the

assumption that—

(a)   

the surrendering company makes a claim under section 37 in relation

to the loss mentioned in subsection (1)(c) or (2)(b), and

25

(b)   

relief under that section is to be given in relation to the loss before the

group relief is given.

(4)   

If section 148 also applies in relation to the claim for group relief, in giving

effect to subsection (3) of this section the surrenderable amounts for the

purposes of subsections (3) and (4) of that section are to be reduced by the

30

amount of relief to be given on the surrendering company’s claim as

mentioned in subsection (3)(b) of this section.

148     

Conditions 1 and 2: surrendering company in group of companies

(1)   

This section applies if—

(a)   

the claimant company makes a claim for group relief based on

35

consortium condition 1,

(b)   

it is the surrendering company that is owned by the consortium, and

(c)   

the surrendering company is also a member of a group of companies.

(2)   

This section also applies if—

(a)   

the claimant company makes a claim for group relief based on

40

consortium condition 2, and

(b)   

the surrendering company is a member of a group of companies.

(3)   

No group relief is to be given on the claim (“the current claim”) unless the

surrendering company’s surrenderable amounts for the surrender period

exceed the group’s potential relief.

45

 
 

 
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