Corporation Tax Act 2010 section 146

Conditions 2 and 3: companies in link company's group

Section 146 restricts the amount of group relief that can be claimed where a link company connects a consortium to a group of companies, ensuring that the link company's group cannot collectively obtain more relief than the link company alone could have claimed.

• Where a company owned by a consortium surrenders losses (consortium condition 2), the total group relief claimed by the link company and its fellow group members together cannot exceed what the link company alone could have claimed, ignoring any shortage of profits in the link company itself.
• Where the link company and its group members surrender losses to a company owned by the consortium (consortium condition 3), the claimant company cannot receive more relief in total than it could have absorbed from the link company alone, based on the claimant's own available profits.
• If the link company and the claimant company have different accounting periods, the restriction is calculated by assuming the link company's accounting period is the same as the claimant company's accounting period.
• Key definitions apply: a "consortium claim" is any claim based on consortium conditions 1, 2 or 3; a "group company" is any company in the same group as the link company (but not the link company itself); and "UK related" has the meaning given by section 134.