Can consortium relief be used with less than 75% ownership?

Yes. Consortium relief applies where a company is owned 75% or more by a consortium of companies each holding at least 5%. Each consortium member can surrender or claim losses in proportion to their ownership. Consortium relief is more complex than group relief and requires careful calculation.

What is the 75% economic interest test?

Alongside the 75% ordinary share capital test, group relief also requires a 75% economic interest test — each member of the group must be entitled to at least 75% of distributable profits and at least 75% of assets on winding up. This prevents structures where the share capital test is met but economic benefits are diluted.

Can non-UK resident companies claim or surrender group relief?

Generally, group relief only applies between UK resident companies or companies with a UK permanent establishment. However, following the Marks & Spencer litigation, cross-border group relief may be available in very limited circumstances where losses are definitively stranded in an EEA company with no prospect of relief in that jurisdiction.

Does group relief affect the small profits rate thresholds?

Group relief reduces the claimant company's taxable profits, which may bring it below a CT rate threshold. This can potentially reduce the CT rate from 25% to marginal relief or even to 19%, amplifying the tax saving. The calculator shows the effective CT saving based on the applicable rate.

Can a company receive group relief from more than one company simultaneously?

Yes. A claimant company can receive group relief from multiple surrendering companies in the same period, provided the total relief does not exceed the claimant's own profits. Each surrender is a separate claim and each surrendering company must formally consent.

What is the time limit for group relief claims?

Group relief claims must be made within 2 years of the end of the claimant company's accounting period. This is a strict statutory deadline. Late claims cannot be accepted by HMRC. It is therefore important to identify group relief opportunities before filing CT returns and to manage group filing timetables carefully.

Does group relief affect the PAYE/NIC cap for R&D credits?

Group relief and R&D credits are separate regimes. Group relief reduces taxable profits, while R&D credits are an above-the-line credit reducing the CT liability directly. The PAYE/NIC cap applies to R&D credits independently of group relief. However, group relief that eliminates profits may turn a profitable company into a loss-maker, potentially affecting its R&D credit treatment.

Can group relief be claimed for non-trading losses?

Non-trading loan relationship deficits, property business losses, and excess management expenses of a holding company can be surrendered as group relief, in addition to trading losses. Each type of loss has specific rules about when it can be surrendered and the order in which it must be used within the surrendering company first.

Is group relief available in the period a company joins or leaves a group?

Group relief is only available while both companies are members of the same group. If a company joins or leaves mid-period, only losses or profits arising during the overlap (when both were group members) can be surrendered. The losses and profits are deemed to accrue evenly over the accounting period unless evidence shows otherwise.

Can group relief be used to defer rather than save tax?

If a company surrenders a loss that it could have carried forward against future profits, using group relief immediately may save tax now but reduces future relief. If the surrendering company is expected to return to profit at a higher CT rate in future, it may be better to retain losses in that company. Tax planning should consider the timing of relief across the group.

What records should be kept to support a group relief claim?

Companies should retain evidence of the group structure (share certificates, shareholder registers), the accounting periods of all group companies, the agreed terms of the surrender (payment or nil consideration), and the CT returns showing the claim and the surrender. HMRC can enquire into group relief claims within the normal enquiry window.

Is there a minimum ownership period before group relief can be claimed?

There is no minimum ownership period as such, but the 75% ownership must exist throughout the overlapping accounting period for which the relief is claimed. Where a company is acquired part-way through a period, group relief is only available for the portion of the period after the acquisition when the 75% relationship existed.

How is group relief shown in the financial accounts?

In the surrendering company's accounts, the CT charge may reflect a deferred tax asset if there is no payment for the surrender. In the claimant's accounts, the CT charge is reduced by the group relief received. If a payment is made, it is a trading transaction in both companies' accounts. Under IFRS and UK GAAP, deferred tax assets related to group relief must be assessed for recoverability.

Can losses from an LLP be surrendered as group relief?

LLPs are typically transparent for tax purposes — their members (if companies) are taxed on their share of profits directly. A company member of an LLP includes its share of LLP losses in its own CT return, and those losses may then be available for group relief surrender in the same way as any other company trading loss.

What happens to group relief if the group structure changes after the claim?

Once group relief has been properly claimed and consented to, a subsequent change in the group structure does not invalidate the claim. The relief stands as long as the 75% condition was met at the time of the surrender. However, arrangements designed to artificially create or maintain a group relationship for relief purposes may be challenged under anti-avoidance provisions.

Can group relief be set against investment income as well as trading income?

Group relief reduces the claimant company's total taxable profits, which includes both trading and non-trading income (rental income, investment income, non-trading loan relationship credits). It is not limited to trading profits only. The claimant can therefore offset surrendered losses against any category of income in its CT computation.

Does a company need HMRC consent to surrender losses as group relief?

No pre-approval from HMRC is required. Group relief is self-assessed — the companies agree the terms of the surrender, the surrendering company files a CT600C, and the claimant company includes the claim on its CT600. HMRC may enquire into the claim after filing, but there is no advance clearance procedure for straightforward group relief claims.

How does overseas permanent establishment interact with group relief?

Losses arising in an overseas permanent establishment of a UK resident company can be included in that company's UK CT computation if the UK-PE exemption has not been elected. If included in UK profits, those PE losses can form part of the company's overall loss available for group relief surrender in the normal way.

Is group relief available for losses in the year of commencement?

Yes. A newly incorporated company can surrender losses arising in its first accounting period, provided it is part of a 75% group from the outset. Pre-trading expenditure treated as a loss in the first accounting period of trading is also available for surrender.

What is the difference between group relief and consortium relief?

Group relief requires 75% ownership and the surrendering company must be a 75% subsidiary of the claimant (or vice versa, or both subsidiaries of a common 75% parent). Consortium relief applies where a company is owned at least 75% by a consortium of companies, each owning at least 5%. Consortium relief is proportional to each consortium member's share; group relief is not so restricted.

Can non-resident companies be part of a UK group relief group?

A non-UK resident company can be part of the ownership chain for group relief purposes — it can hold shares in UK companies that qualify for group relief between them. However, the non-resident company itself generally cannot claim or surrender UK group relief unless it has a UK permanent establishment with UK-sourced trading losses.

What disclosure is required on the CT return for group relief?

The claimant company must complete boxes at section A of the CT600 showing group relief claimed, and must file a CT600C attachment listing the surrendering companies, the periods, and amounts. The surrendering company should also include a note on its return showing amounts surrendered and to which companies. Both must be within the 2-year time limit.

Are there rules preventing group relief being used more than once on the same loss?

Yes. Each £1 of loss can only be relieved once. A surrendering company cannot surrender the same loss to multiple claimant companies. The total amount surrendered across all claimants cannot exceed the total available loss. The surrendering company must reduce its own loss register by the amounts surrendered.

Can group relief be amended after a return is filed?

Yes. A CT return can be amended within 12 months of the filing date. Group relief claims included in the return can be increased, decreased, or withdrawn in an amendment. After the amendment window closes, group relief cannot be changed unless HMRC opens an enquiry into the return.

How does group relief interact with creative industry reliefs?

Creative industry reliefs (film, TV, video games, theatre, etc.) can generate enhanced losses. The enhanced loss element above the actual commercial loss can be surrendered as group relief up to the cap applicable to each creative sector relief. The specific rules for each relief should be checked, as the surrenderable element varies.

Can an investment company receive group relief?

Yes. An investment holding company with taxable income (rental, non-trading loan relationship credits, management charges) can receive group relief from a trading subsidiary and offset the surrendered losses against its own taxable income. This is a common strategy for holding company structures where the holding company has income and operating subsidiaries have losses.

Is there any planning opportunity if losses cannot be fully surrendered?

If total group losses exceed total group profits, the excess losses must be carried forward in the surrendering company against its own future profits. Planning may include accelerating income recognition in the claimant, deferring expenses, or using other reliefs first to maximise the amount of profit available to absorb group relief.

How is group relief treated for quarterly instalment payment purposes?

Large companies paying CT in quarterly instalments must estimate group relief expected to be claimed or surrendered when calculating instalment amounts. If group relief reduces the estimated CT liability significantly, instalment amounts can be reduced accordingly. Errors in estimation may lead to interest charges on any underpayment.

What professional qualifications are relevant for group relief planning?

Group relief is a complex area involving CT law under Parts 5 and 5A of CTA 2010. Chartered Tax Advisers (CTAs) and chartered accountants with corporate tax expertise are best placed to advise on group relief planning. For multinational structures, specialist international tax knowledge is also required.

What is the statutory reference for group relief?

Group relief is primarily governed by Part 5 (sections 97–188) and Part 5A (sections 188A–188FJ) of the Corporation Tax Act 2010 (CTA 2010). The 75% subsidiary definition is in section 151. Consortium relief is in sections 130–138. Anti-avoidance provisions are in sections 188 and 183.

Corporation Tax Group Relief Calculator 2025/26

Q: Can losses be surrendered upward to a parent company?

Yes. Losses can be surrendered by a subsidiary (down), by a parent to a subsidiary (down), or between two companies with a common 75% parent (sideways). The direction of surrender depends on which company has the loss and which has the profit, regardless of which is parent and which is subsidiary.

75% Ownership Required

Group relief requires at least 75% common ownership. The ownership can be direct (Company A owns 75%+ of Company B) or indirect through a parent company. Without the 75% threshold, group relief is not available and losses cannot be shared.

How Group Relief Works

Group relief allows profitable group companies to absorb losses from loss-making group members, reducing the overall CT bill. The loss is said to be "surrendered" by the losing company and "claimed" by the profitable company. The claimant deducts the surrendered loss from its own taxable profit.

The maximum relief is limited to the smaller of the surrendering company's loss and the claimant's profit — you cannot use more loss than the claimant has profit. Both amounts may also be limited by the overlapping accounting period if the companies have different year-ends.

Corresponding Accounting Periods

If Company A has a 12-month period ending December and Company B has a 12-month period ending March, only 9 months overlap. Group relief is then limited to 9/12 (75%) of each company's loss or profit. The overlap percentage you enter should reflect this pro-ration.

The CT Saving

The actual tax saving depends on Company B's CT rate. At the 25% main rate, £100,000 of group relief saves £25,000 in CT. At the 19% small profits rate, the same relief only saves £19,000. It is most efficient to route group relief to the claimant company with the highest CT rate.

Frequently Asked Questions

What is group relief? +

Group relief allows one group company (the surrendering company) to transfer its trading losses to another group company (the claimant company), which then uses those losses to reduce its own taxable profit and CT bill. Group relief requires at least 75% common ownership between the companies.

What is the 75% ownership test for group relief? +

Group relief requires a 75% group relationship. This means one company must own at least 75% of the ordinary share capital of the other, OR both companies must be 75% subsidiaries of a common parent. Indirect ownership through intermediate companies counts, but the 75% must be maintained at each level of the chain.

What types of losses can be surrendered as group relief? +

The main type of loss that can be surrendered is a trading loss under s.37 CTA 2010. Excess capital allowances, property business losses, qualifying charitable donations, and excess non-trading loan relationship deficits can also be surrendered. Capital losses cannot be surrendered as group relief.

What is the corresponding accounting period rule? +

Group relief is limited to the overlapping period between the surrendering company's and the claimant company's accounting periods. If Company A has a December year-end and Company B has a March year-end, only the overlapping months can be used. The loss available is pro-rated to the overlap.

How is the maximum group relief calculated? +

Maximum group relief = minimum of (surrendering company's loss × overlap %, claimant company's profit × overlap %). The relief cannot exceed either the surrendered loss or the claimant's profit, and must be further limited to the overlapping accounting period if periods differ.

Is there a payment required for group relief? +

Group relief can be surrendered for no payment or for a payment up to the CT value of the relief. HMRC does not require a payment between group companies, but commercial groups often charge a notional amount. Payments for group relief up to the CT value of the surrendered losses are disregarded for CT purposes.

Can losses be surrendered upward to a parent company? +

Yes. Losses can be surrendered by a subsidiary (up to parent), by a parent to a subsidiary (down), or between two companies with a common 75% parent (sideways). The direction of surrender depends on which company has the loss and which has the profit.

Can group relief be used to create a loss in the claimant company? +

No. Group relief can only reduce the claimant company's profits to nil — it cannot create a loss in the claimant. Excess group relief beyond the claimant's profit is simply wasted; it does not carry forward in the claimant company.

How does group relief interact with the CT rate? +

Group relief reduces the claimant company's taxable profits. The CT saving is the group relief amount multiplied by the CT rate applicable to the claimant company — which could be 19%, 25%, or a marginal rate between those figures depending on the claimant's profit level and any associated companies.

Can a company carry forward losses that it cannot surrender? +

Yes. If a company has a loss that exceeds the available group relief, it can carry the remaining loss forward against its own future profits. Post-April 2017 trading losses carried forward can also be surrendered as group relief in future periods, subject to the usual 50% restriction on carried-forward loss offset.

Are there anti-avoidance rules for group relief? +

Yes. Group relief can be refused if arrangements are in place whose main purpose (or one of the main purposes) is to enable losses to be surrendered that would not otherwise be available. HMRC can also challenge arrangements that artificially move losses across group boundaries or manufacture group relationships.

How is group relief claimed on the CT return? +

The claimant company claims group relief on its Corporation Tax return (CT600). The surrendering company must formally consent to the surrender by submitting a CT600C surrender schedule. Both companies must file within the normal time limits, and group relief claims must generally be made within 2 years of the end of the claimant's accounting period.