Corporation Tax Act 2010 section 146B

Conditions 1 and 3: claimant company not controlled by surrendering company etc.

Section 146B restricts consortium group relief where arrangements are in place that prevent the surrendering company or link company from controlling the claimant company, and those arrangements form part of a tax avoidance scheme.

• The section applies where a consortium-owned claimant company claims group relief under consortium condition 1 or consortium condition 3, and arrangements exist that prevent the surrendering company or link company (alone or with other consortium members) from controlling the claimant company.
• The arrangements are caught only if, but for those arrangements, the surrendering company or link company (alone or with other consortium members) would control the claimant company, and the arrangements form part of a scheme whose main purpose (or one of its main purposes) is to enable the claimant company to obtain a tax advantage.
• Where the section applies, the group relief available on the claim is calculated as if the claimant company's total profits for the overlapping period were only 50% of what they would otherwise be.
• The overlapping period is determined in accordance with section 142, and the definition of tax advantage is taken from section 1139.