Corporation Tax Act 2010 section 305

Group relief and group relief for carried-forward losses

Section 305 restricts the use of group relief and group relief for carried-forward losses against a company's ring fence profits from oil extraction activities.

• Group relief can only be set against a claimant company's ring fence profits if the surrendered losses arose from oil extraction activities or oil rights — losses from other activities cannot reduce ring fence profits.
• Carried-forward losses surrendered as group relief under the carried-forward loss provisions cannot be set against ring fence profits at all.
• When calculating how much a surrendering company can give up as group relief, its relevant ring fence profits are excluded from its gross profits, preventing those profits from inflating the surrenderable amount.
• Relevant ring fence profits are the company's full ring fence profits, reduced by any qualifying charitable donations allowable for the period — if no such donations were made, the full ring fence profits are excluded.