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Group Loss Relief - Is this allowed?

Group Loss Relief - Is this allowed?

Can a trading loss from a UK resident subsidiary be transfered and set off against rental income surplus of the UK resident holding Company for Corporation Tax purposes?

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By blok
20th Mar 2012 18:42

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Yes.

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By pingu10
JAADAMS
21st Mar 2012 09:38

Is there no restriction that profits have to be of the same trade?

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21st Mar 2012 10:19

No

Group relief just wouldn't work if that were the case.

Essentially, you (the surrenderor) can put your trade losses, property business losses and non-trade loan relationship deficits in a big bucket, and give the bucket (surrender the losses) to another member of a 75% group.

The recipient of the losses (the claimant) can then take all the losses out of the bucket in one big indistinguishable chunk and set them against their total profits (relieve the losses).

There are restrictions on the amount that can be surrender and relieved where year-ends aren't coterminous (although generally they will be) and where both surrenderor and claimant haven't been members of the group throughout a period.

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By blok
21st Mar 2012 10:20

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no there isn't.  the rules are quite relaxed.

you need to ensure that the periods are co-terminus and the claimant company should claim any reliefs in priority to the group relief claim.

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