SolvedCTM05140 | Corporation tax: restriction on relief for carried-forward losses: deductions allowance for a company in a group for a whole accounting period
From HM Revenue & Customs · Company Taxation Manual
A group of companies has a single deductions allowance known as the group deductions allowance (CTM05190). For these purposes, a group is defined at CTA10/S269ZZB (CTM05160).
The amount of the group deductions allowance is £5 million per 12 month accounting period, reduced proportionately if the accounting period is less than 12 months (CTA10/S269ZR (2) and (4)(b)).
The allowance is allocated among group members using the group allowance allocation statement (CTM05200) which is submitted by the group’s nominated company (CTM05180).
The group may choose how its deductions allowance is divided among group members provided none of its members exceeds the maximum total allowance that may be allocated to a company. This is £5 million for a 12 month accounting period (CTM05210).
Where a company is in one group for the whole of its accounting period, the company’s deductions allowance is the amount allocated to it on the allocation statement. The company then specifies its deductions allowance on its tax return (CTA10/S269ZZ).
If a company is in one group for the whole of its accounting period and is not allocated any deductions allowance by the group, the company has a deductions allowance of nil.