Corporation Tax relief may be available when a company or organisation makes a trading loss. Companies that are eligible for Group Relief can transfer losses and certain other deficits to companies within the same group by means of Group or Consortium Relief. The use of Group Relief allows losses arising in the accounting period to be surrendered to a group company for that period. In addition, losses that arose on or after 1 April 2017 and are carried forward to a later accounting period may be surrendered as Group Relief for carried-forward losses.
Companies attempting to either surrender or claim losses for Group Relief or Group Relief for carried forward losses must meet the required conditions. For companies to be members of the same group, one company must be a 75% subsidiary of the other, or both must be 75% subsidiaries of a third company. The definition of '75% subsidiary' requires one company to have direct or indirect beneficial ownership of at least 75% of the ordinary share capital in another. There are also further qualifying tests that may apply for Group Relief purposes.