Corporation Tax Act 2010 section 188DH

Condition 1: ownership proportion

Section 188DH limits the amount of group relief for carried-forward losses that a claimant company may receive under a consortium condition 1 claim, by reference to the surrendering company's ownership proportion in the claimant company.

• Relief is capped at the ownership proportion of the claimant company's relevant maximum for the overlapping period
• The ownership proportion is the lowest of four measures: ordinary share capital held, entitlement to distributable profits, entitlement to assets on winding up, and direct voting power
• If any of those proportions changes during the overlapping period, an average for the period is used instead
• Where the claimant company is owned through a holding company arrangement, the ownership proportion is measured by reference to the holding company rather than the claimant company itself