Basics of group relief: Part 1

Group relief is a long-standing corporation tax relief which allows a company to surrender non-capital tax losses to another company in the same ‘group’. Until April 2017 losses could only be surrendered for overlapping periods however in 2017 CTA 2009 Chapter 5A was introduced which permitted losses to be carried forward in one company and then surrendered to another.

An analogous relief also exists for capital losses in TCGA 1992 s 170 however this relief has a similar but different definition of what is or is not a group company. Capital gains also has a mechanism not found in relief for non-capital losses in TCGA 1992 s 171A to transfer the gain from the company making a gain to the company containing the losses.

This article sets out the basics of group relief and is intended for those new to advising corporate...