Group Tax Relief - Common Economic Control

Group Tax Relief - Common Economic Control

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Under the Group Tax Relief Rules

Section 840 does not define ‘control’ merely in terms of direct shareholdings and voting rights in the company concerned. A person or persons have Section 840 control if they have power to secure that the affairs of the company are conducted in accordance their wishes.

http://www.hmrc.gov.uk/manuals/ctmanual/CTM80170.htm

So my understanding is that if you have 2 businesses one with a loss and the other with a profit both with identical share ownership (individuals not companies) Group Tax Relief should be available, do you agree? do you have any cases or examples of this?

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By gbuckell
15th Apr 2013 11:31

Anti-avoidance

I think you will find this is an anti-avoidance provision. Group relief is denied where a member of a group is under the control of a company outside the group.

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By johngroganjga
15th Apr 2013 11:48

But group relief is about when one company controls another, not when both are under the common control of the same individuals.  So on the facts you set out the question of group relief does not arise (as you do not have a group) regardless of the detailed definitions of control.

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