Corporation Tax Act 2010 section 188DL

Conditions 1 and 2: claimant company in group of companies

Section 188DL limits the amount of consortium-based group relief for carried-forward losses that a claimant company can claim when it is also a member of a group of companies, by requiring the claimant's relevant profits to be reduced by the relief potentially available through its group membership.

• Where a company claims group relief for carried-forward losses based on consortium condition 1 or 2 and is also a member of a group, the amount available under the consortium claim must be reduced by the group's potential relief.
• The group's potential relief is the total of the maximum group relief for carried-forward losses (under Part 5A) and the maximum current-year group relief (under Part 5) that the claimant company could claim based on the group condition.
• The reduction cannot bring the amount below nil — in other words, the consortium claim amount has a floor of zero even if the group's potential relief exceeds it.
• When calculating the group's potential relief, any prior claims for group relief or group relief for carried-forward losses already made by other members of the same group must be taken into account first.