Corporation Tax Act 2010 section 188EF

The potential Part 5 group relief amount

Section 188EF explains how to calculate the "potential Part 5 group relief amount", which is one of the three figures compared when determining the cap on group relief for carried-forward losses under section 188EB.

• Start by calculating the maximum group relief the claimant company could theoretically have received under Part 5 for the surrendering company's losses in the specified loss-making period, ignoring any shortage of profits against which deductions could have been made.
• Deduct any group relief actually given to the claimant under Part 5 for those same losses, then multiply the result by a fraction that isolates certain categories of loss (broadly, those in section 99(1)(a), (c), (e), (f) and (g)) as a proportion of all loss categories in section 99(1)(a) to (g).
• Finally, deduct any group relief for carried-forward losses already given on related claims under section 188CC — a claim is "related" if it involves the same surrendering company and the same specified loss-making period.
• The calculation imports all the conditions of Part 5, including consortium ownership proportion limits, but applies them by reference to the period in which the relevant losses originally arose rather than the claim period.

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