Corporation Tax Act 2010 section 114

The equivalence condition

Section 114 requires that the losses or other amounts claimed by an EEA resident company must correspond to amounts that would qualify for group relief if they had arisen under UK tax rules.

• The equivalence condition ensures that only losses or amounts equivalent to those eligible for UK group relief can be claimed by EEA resident companies.
• The EEA amount must correspond to an amount that would qualify for group relief under UK corporation tax principles.
• This acts as a safeguard to prevent claims based on types of losses or amounts that would not be relievable if they had arisen in the UK.
• The condition was originally based on paragraph 2 of Schedule 18A to the Income and Corporation Taxes Act and was amended by Finance Act 2022.