Corporation Tax Act 2010 section 188EG

Sections 188EC to 188EE: supplementary

Section 188EG establishes the ordering rules for simultaneous group relief claims for carried-forward losses and provides a safeguard to modify calculations where the standard proportional approach would produce an unjust or unreasonable result.

• When two or more group relief claims for carried-forward losses are made at the same time, the companies involved may elect the order in which they are treated as made; failing that, HMRC will direct the order.
• Relief given on an earlier (prior) claim is always calculated before relief on any later claim, ensuring a strict sequential approach.
• Where any of the specified proportions used in the limitation calculations under sections 188EC, 188ED or 188EE would produce an unjust or unreasonable result, those proportions must be modified to achieve a just and reasonable outcome.
• The proportions subject to this fairness override are those found in sections 188EC(2)(a), 188EC(6) step 1, 188EC(8)(a), 188ED(1) step 3 and 188EE(4)(a).