Corporation Tax Act 2010 section 188BF

Restriction where surrendering company has no income-generating assets

Section 188BF prevents a company from surrendering losses or other amounts as group relief where it holds no assets capable of producing income at the end of the surrender period.

• A company cannot surrender losses or other amounts if it has no income-producing assets at the end of the surrender period.
• The restriction applies to all types of losses and amounts that would otherwise be available for surrender under the group relief provisions.
• The test is applied at the end of the surrender period — it is the position at that point that determines whether surrender is blocked.
• The purpose of this rule is to stop groups from keeping otherwise dormant companies alive purely to make use of their accumulated losses through group relief.