Corporation Tax Act 2010 section 188DD

Claimant company's relevant maximum for overlapping period

Section 188DD explains how to calculate the maximum amount of group relief that a claimant company can use during a period where the claim period and the surrender period overlap.

• The relevant maximum is found by starting with the company's overall loss restriction cap for the claim period, then reducing it by losses the company has already used that are subject to the corporate loss restriction rules.
• After making that reduction, the result is time-apportioned to reflect only the portion of the claim period that falls within the overlapping period.
• Certain categories of loss — such as those from creative industry trades, ring fence trades, oil contractor activities, and insurance company shock losses — are excluded from the Step 2 reduction because they are not subject to the corporate loss restriction.
• Where the company's qualifying profits for the claim period are lower than its deductions allowance, the calculation is modified so that qualifying profits replace the relevant maximum as the starting point, and the exclusions for unrestricted losses are switched off.