Tx notes fa22 Final

Note 
that capital losses are not eligible for group relief but are dealt with separately under gains 
group membership. 
4.5. The claimant company 
The relief is taken against the TTP of the same period as the surrendering company’s loss making 
period.
4.6. Group relief
(a)
The important points to remember as regards group relief are:
‣
Losses can be group relieved against 100% of a 75% subsidiary’s TTP, or conversely 
100% of a 75% subsidiary’s loss can be group relieved. 
‣
The relief is not restricted to the percentage shareholding.
‣
Any amount of current year trade and business property losses can be group relieved.
‣
Amounts of brought forward unused trading and business property losses that cannot be 
set off in surrendering company may also be group relieved.
(b)
Where the accounting periods of two group companies are di
ff
erent, then group relief will be 
restricted to the corresponding or coterminous period. It is therefore necessary to time 
apportion both the loss making period and the profit making periods to calculate how much 
loss may be set against how much profit in each AP.
(c)
In TX-UK only UK resident companies are eligible for group relief though two UK resident 
subsidiaries of an overseas resident parent company would be able to group relieve with one 
another though neither could group relieve with its overseas parent company.
 
Example 3
 
 
Continuing with Example 2 suppose that B Ltd had commenced trading on 1 October 2022 
preparing accounts for the six-month period to 31 March 2023.
Discuss the group relief available in respect of Z plc trading loss for y/e 31 March 2023 if it 
were to consider surrendering the trading loss to B Ltd. 

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