Corporation Tax Act 2010 section 177

Cases in which both sections 172 and 174 apply

Section 177 deals with how to determine a company's share of group relief when two different restriction rules — one based on the claimant company's unused allowances and another based on the surrendering company's available profits — both apply at the same time.

• This section applies where both section 172 (which limits relief by reference to the claimant company) and section 174 (which limits relief by reference to the surrendering company) are relevant, but section 170 does not apply.
• Four different calculations of company A's proportion must be carried out: using the basis in section 172(1) alone; using the basis in Step 4 of section 174 alone; using both bases together; and ignoring both bases entirely.
• Company A's proportion for group relief purposes is whichever of these four calculations produces the smallest figure.
• This rule ensures that where two separate restrictions overlap, the most restrictive outcome prevails, preventing excessive relief being claimed.