Corporation Tax Act 2010 section 147

Conditions 1 and 2: surrenderable amounts including trading loss

Section 147 restricts the amount of trading losses that a company owned by a consortium can surrender as group relief, by requiring that the surrendering company first uses those losses against its own profits before any remainder can be surrendered.

• Where a consortium-owned company has a trading loss it wishes to surrender, it must first set that loss against its own profits before surrendering any balance as group relief.
• This rule applies under both consortium condition 1 (direct consortium claims without a link company) and consortium condition 2 (claims involving a link company).
• The group relief calculation assumes the surrendering company has claimed sideways relief against its own profits first, reducing the amount available for surrender.
• If section 148 also applies to the same claim, the surrenderable amounts under that section are reduced by the relief already assumed to be given within the surrendering company under this section.

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