Corporation Tax Act 2010 section 188BC

Restriction on surrendering pre-1 April 2017 losses etc.

Section 188BC prevents certain carried-forward losses and expenses that originated before 1 April 2017, as well as qualifying charitable donations treated as management expenses, from being surrendered as group relief.

• Non-trading losses on intangible fixed assets, management expenses, and UK property business losses that were first recognised in accounting periods beginning before 1 April 2017 cannot be surrendered as group relief, even if they have been carried forward into a later surrender period.
• The restriction applies regardless of when the losses arrive in the surrender period — what matters is the accounting period in which the loss or expense originally arose.
• Qualifying charitable donations that have been carried forward as management expenses under the investment business rules cannot be surrendered at all, irrespective of when they originated.
• These restrictions form part of the wider reforms introduced from April 2017 that allow carried-forward losses to be surrendered as group relief but limit that flexibility to losses arising from 1 April 2017 onwards.