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CT consortium relief c/fwd

relief received, but no profits in year.

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I can't find any examples or leg about this and am struggling with the practicalities, so maybe I'm missing something in the concept ...

A Ltd is owed 50/50 B Ltd & C Ltd. Relevant taxable profits/losses are as follows:

- A £60k loss CY

- B £35k profit CY

- C £35k loss c/fwd, £30k profit CY

In (my) theory CT600s are as follows:

- A: £60k loss - £60k consortium relief = £nil

- B: £35k profit - £30k relief = £5k taxable

- C: £30k profit - £30k b/f - £30k relief = £35k losses c/f

I've allocated it as 'group/consortium relief carried forward losses', but TaxCalc is rejecting C.

How do I treat the consortium relief given to C?

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By Matrix
12th Feb 2019 09:00

I thought you had a similar question a few weeks ago and the b/f losses have to be used first?

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to Matrix
12th Feb 2019 09:52

But what happens to the consortium relief and how do I show it on the CT600?

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By Matrix
to atleastisoundknowledgable...
12th Feb 2019 13:00

No consortium relief for C. If that is what you are asking.

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to Matrix
12th Feb 2019 13:17

That is.

So what happens in A's records, it's given £30k to B and carrying forward £30k. Is this to remain c/f until usable by C?

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12th Feb 2019 14:10

C Ltd can't take any consortium relief and B Ltd can only take £17.5K of consortium relief (50% - its interest in A - of its profit), so A Ltd can only surrender £17.5K as consortium relief. The remaining £42.5K of A Ltd's losses can only be c/f in A Ltd.

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to Vile Nortin Naipaan
12th Feb 2019 14:40

So a consortium relief claim is restricted to the ownership proportion of HALF the company's profits? I'm not being facetious, but where in the legislation does it say that ? I can't see any reference to that.

Looks like this is the 4th year it's been done wrong then. Consortium relief has been claimed to reduce the full profit of B & C most years.

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By DJKL
to atleastisoundknowledgable...
12th Feb 2019 14:51
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to atleastisoundknowledgable...
12th Feb 2019 15:43

The comment above is wrong.

A 50% consortium member can take 50% of the consortium company's loss, provided the member has sufficient profits to cover that 50%.

Or a 50% consortium member can surrender losses of up to 50% of the consortium company's profits.

So in this case B can take 50% of A's losses, ie £30k. If A's losses exceeded £70k then B's claim would be restricted to £35k, being its available profits.

It is true that A would need to carry forward unused losses but, depending on when they arose, they may be surrenderable to B and/or C in future periods.

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to Wilson Philips
12th Feb 2019 15:14

Just so we’re clear, (assumptions allowing) co X can claim consortium relief of its % interest in the loss-making ‘subsid’, upto the value of X’s profits.

So is the general consensus that I was right and PNL was wrong on a tax question?

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to atleastisoundknowledgable...
12th Feb 2019 15:31

On point 1, yes.

I don't understand point 2.

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to Wilson Philips
12th Feb 2019 17:02

So of A's £60k loss, it relieves £30k to B and nothing to C.

£30k loss is therefore c/f (assuming nil trade next year) how does that get split? Do I need a side schedule to show that it's 'due' to C? Or next year does that £30k have to be split 50/50?

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to atleastisoundknowledgable...
12th Feb 2019 17:22

You've got me there! Instinctively, I would have said that the loss carried forward is treated in the same way as a loss arising in the year, ie surrenderable 50% to each of B and C. But I would need to examine the legislation to confirm.

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to atleastisoundknowledgable...
12th Feb 2019 17:36

Brain fart. Ignore me.

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to Vile Nortin Naipaan
12th Feb 2019 19:32

Given the tone of your earlier email, I would respectfully suggest that an apology would also be in order.

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to Wilson Philips
12th Feb 2019 21:15

Chance would be a fine thing, but I appreciate you having my back on this :D

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to Wilson Philips
13th Feb 2019 10:33

Wilson Philips wrote:

Given the tone of your earlier email, I would respectfully suggest that an apology would also be in order.

I disagree, and I'm sure you'll come to realise that too, given time.

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By Matrix
12th Feb 2019 21:31
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