Taxation (International and Other Provisions) Act 2010 section 371SL

Group relief etc.

Section 371SL establishes rules preventing a controlled foreign company (CFC) from benefiting from group relief provisions when calculating its assumed taxable total profits, and stops losses from being relieved twice where they have already been surrendered as group relief in the UK.

• When calculating a CFC's assumed taxable total profits, the CFC is treated as if it were not a member of any group of companies or consortium, effectively switching off group loss relief provisions.
• Where a CFC has actually surrendered losses to another UK company as group relief (for example, losses from a UK permanent establishment), those losses must be ignored in working out the CFC's assumed taxable total profits.
• This prevents double relief — the same losses cannot both reduce the UK company's profits through group relief and also reduce the CFC's assumed taxable total profits for CFC charge purposes.
• These rules are subject to the corporate interest restriction provisions in section 371SLA.