Corporation Tax Act 2010 section 132

Consortium condition 1

Section 132 sets out the first consortium condition that must be met for group relief claims to be made between a company owned by a consortium and a member of that consortium.

• Group relief can flow "upwards" from a consortium-owned trading or holding company to a consortium member, provided both companies are UK related.
• Group relief can also flow "downwards" from a consortium member to a consortium-owned trading or holding company, again provided both companies are UK related.
• The condition is not met where the consortium member holds shares in the consortium-owned company (or relevant holding company) as trading stock, meaning a profit on selling those shares would be a trading receipt.
• The restriction on share dealers ensures that group relief is only available where the consortium relationship reflects a genuine long-term investment rather than shares held as circulating capital.