Corporation Tax Act 2010 section 188CH

Consortium condition 3

Section 188CH sets out "consortium condition 3", one of the alternative conditions that must be satisfied for a company to claim group relief for carried-forward losses where the surrendering company is owned by a consortium.

• The surrendering company must be either a trading company or a holding company, and it must be owned by a consortium of which the claimant company is a member.
• Both the surrendering company and the claimant company must be UK related.
• The condition is blocked if a hypothetical sale by the claimant company of its shareholding in the surrendering company (or in the relevant holding company) would produce a profit treated as a trading receipt of the claimant company.
• Where the surrendering company is consortium-owned through a holding company arrangement, the relevant shareholding for the sale test is the claimant company's shares in that holding company rather than directly in the surrendering company.