The weakest link

REBECCA MURRAY suggests that a legislative change is required to the rules relating to offshore ‘link companies’ in group relief claims.

READERS MAY RECALL that FA 2000 amended the group relief rules so that amongst other things it was no longer necessary for the company or companies by virtue of which the surrendering and claimant companies were in the same group to be resident in the UK. What appears to have happened is that the draftsman has overlooked the mechanics of the link company rules contained in TA 1988 s 406(2) with the result that a member of a group of companies of which another member of that group (the ‘link company’) is a consortium member can only claim consortium relief from a consortium company where the link company is resident in the UK. (References are to TA 1988 unless stated otherwise.)