Corporation Tax Act 2010 section 269ZS

Group deductions allowance and the nominated company

Section 269ZS sets out how a group of companies within the charge to corporation tax establishes a group deductions allowance of up to £5 million per accounting period by nominating a single company to act on behalf of the group.

• All group members within the charge to corporation tax must unanimously nominate one company, and the nomination must be signed by the appropriate person for each member company
• The group deductions allowance is £5 million for a full 12-month accounting period of the nominated company; if the nomination is in effect for only part of a period, or the period is shorter than 12 months, the allowance is reduced proportionally
• A nomination must state its effective date (which may be earlier than the date it is made) and ceases to have effect when a new nomination takes effect, when any group member revokes it in writing to HMRC, or when the nominated company leaves the group or the charge to corporation tax
• HMRC has regulation-making powers covering the form, manner, time limits and procedural requirements for making, revoking or notifying nominations, including the ability to invalidate nominations that do not meet those requirements