Can't get no relief

AS REPORTED IN Taxation 19 December 2005 (see 'Partial victory' Taxation 5 January 2006 page 326) the European Court of Justice ruled — in Marks & Spenser v Halsey — that the UK's group relief rules must allow losses made by EU subsidiaries to be relieved against the profits of UK group companies but only where those losses cannot be relieved against profits in the subsidiary's country.

Clause 27 of the Finance (No 2) Bill 2006 introduces Schedule 1 which — the Lobby Notes state state – ‘provide for an extension to the rules that give relief for losses and other amounts within groups of companies (group relief). Schedule 1 sets out the conditions to be met for foreign losses to be relievable as group relief in the UK. It also sets out how the amount relievable is to be computed...