This document covers these rules in detail, along with the surrenderable amounts; payments; overseas companies; effective use of losses; trapped losses; maximum relief; Non-coterminous periods; company joining/leaving a group; transfer arrangements; commercial arrangements with public authorities; accelerated payments; and group relief restriction.
Group relief allows losses to be surrendered from loss-making companies to profitable companies in the same 75% group. The maximum claim is the lower of either:
- the available loss
- the available profit
In addition, there are rules allowing the allocation of capital gains and losses to other group members. The definition of a 'group' is slightly different for group gains purposes. For information on this, see the Group gains guidance note.
Reforms to corporation tax loss relief
Reforms to the corporation tax loss relief legislation were proposed at Budget 2016. The legislation is in-cluded in Finance (No 2) Act 2017, ss 18-19 and Sch 4, which received Royal Assent on 16 November 2017. For a high-level overview of the reforms, see the Introduction to the reform of corporation tax loss relief guidance note.
However, for accounting periods beginning on or after 1 April 2017, or straddling 1 April 2017, the additional relaxation allowing group relief for carried-forward losses and the related 50% restriction to that relief are dealt with in detail in the following guidance notes and related worked examples:
- Group relief for carried-forward losses
- Carried-forward losses restriction after 1 April 2017
It should be noted that additional anti-avoidance provisions have been introduced specifically to protect against abuse of this and other relaxations that also impact most existing loss provisions. An overview of anti-avoidance provisions is contained in the above guidance notes.