Corporation Tax Act 2010 section 183

Payments for group relief

Section 183 deals with the tax treatment of payments made between group companies in connection with group relief surrenders, ensuring such payments are kept outside the corporation tax system.

• Where two group companies agree on the surrender of losses or other amounts for group relief, the claimant company may make a payment to the surrendering company up to the value of the losses surrendered.
• Any such payment is ignored when calculating the profits or losses of either company for corporation tax purposes — it is neither a taxable receipt nor an allowable deduction.
• The payment is also not treated as a distribution for corporation tax purposes, so it does not give rise to dividend or distribution tax consequences.
• These rules apply only where the payment does not exceed the total agreed loss amounts covered by the group relief claim.