Corporation Tax Act 2010 section 118

The qualifying loss condition: relief for current and previous periods

Section 118 sets out the requirement that, for a loss to qualify for EEA cross-border group relief, no relief must already be available for that loss in the current or any previous period, whether as a deduction in calculating profits or in any other form.

• The section applies to the whole or any part of the EEA loss amount and checks whether relief is available in the current period or any earlier period.
• Relief is considered unavailable only if no part of the EEA amount can be deducted in calculating the profits of any person — not just the surrendering company — for the current or any previous period.
• The test also covers relief that may be given in a form other than a deduction against profits, such as a tax credit or similar mechanism.
• What matters is whether relief is available in principle, not whether it has actually been claimed or given — simply failing to make a claim does not satisfy this condition.