Corporation Tax Act 2010 section 128

Rules for recalculating EEA amount

Section 128 requires that the EEA amount (losses from EEA resident companies) must be recalculated using United Kingdom tax rules before it can be surrendered as group relief.

• The EEA amount must be recalculated by applying United Kingdom corporation tax rules, including any rules that would disallow the amount for UK tax purposes (such as the non-commercial losses rule).
• If the recalculated amount is lower than the original EEA amount, the recalculated figure (or the relevant proportion of it) becomes the amount that may be surrendered as group relief.
• If the recalculated amount is the same as or higher than the original EEA amount, the original EEA amount continues to apply.
• The Treasury has the power to make regulations setting out further details about how the recalculation of the EEA amount should be carried out.