Corporation Tax Act 2010 section 113

Steps to determine extent to which loss etc can be surrendered

Section 113 sets out a step-by-step method for calculating how much of an EEA amount (a loss or other amount arising in a European Economic Area territory) may be surrendered as group relief.

• Any part of the EEA amount already within the UK tax net and available for surrender under normal group relief rules must first be stripped out.
• The remaining EEA amount must satisfy qualifying conditions (detailed in sections 114 to 121); only the part that meets these conditions — the "qualifying part" — can proceed further.
• The EEA amount is then recalculated using UK tax rules and specified assumptions (sections 123 to 126), and the lower of the qualifying part and the equivalent proportion of the recalculated amount is the maximum that may be surrendered.
• A further restriction applies to exclude any amount that falls foul of the anti-avoidance provisions in section 127 dealing with arrangements, and the surrender itself requires the consent of the surrendering company.