Corporation Tax Act 2010 section 188EI

Condition 4: companies in link company's group

Section 188EI limits the total amount of group relief for carried-forward losses that can be claimed through a consortium arrangement where the claimant company is in the same group as a link company (consortium condition 4), by capping the combined claims of the link company and its fellow group members.

• When a claim for group relief for carried-forward losses is based on consortium condition 4, the total relief available is capped across the link company and all companies in its group.
• The cap is set at the maximum amount of relief that the link company alone could have claimed, assuming no group companies had made their own claims under consortium condition 4.
• For the purposes of calculating this cap, the link company is assumed to be UK related, and any shortfall in the link company's own profits is ignored.
• The cap only applies to "relevant" consortium claims — those sharing the same surrendering company, surrender period and specified loss-making period as the claim in question.