OT21056D | Corporation Tax Ring Fence: Losses and Group Relief: Losses Carried Forward: Losses arising after 1 April 2017: Non-decommissioning losses: Group relief

CTA10/S188BB and S305

Group relief for carried forward losses was introduced with effect from 1 April 2017 (CTA10/Part5A).

CTA10/S188BB sets out the types of losses that can be surrendered under the rules for group relief for carried forward losses. Losses carried forward under CTA10/S45 and CTA10/S45B do not fall within this section. As a result pre 1 April 2017 trade losses and post 1 April 2017 decommissioning losses of a ring fence trade cannot be surrendered as group relief for carried forward losses.

S188BB(1)(b) does allow a company to surrender a post-1 April 2017 carried forward non-decommissioning ring fence loss for use against another group company’s non-ring fence profits. However, this only applies where a claim has been made for relief to be given under CTA10/S303C (relief against total profits of the company). The amount of relief allowed is subject to the restriction.

Carried forward losses may only be surrendered after a company has used all its own carried forward losses up to its relevant maximum (CTM82500).

CTA10/S305(1A) prevents companies from making a claim to set group relief for carried forward losses against ring fence profits.