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CT group relief

not 100% sure on the rules ... can't find this in the guidance ...

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I have a client with a 100% group  - A, B, C & Holdco. PCTCT results are as follows:

A:  2019 (£100), 2020 +£100 (relief from 2019), 2021 (£500). [This company is stopping trading so any losses c/f are useless.]

B: 2019 +£100, 2020 +£100, 2021 (£150) 

C: 2019 (£100), 2020 (£100), 2021 £300. [C wasn't in the group in 2019 + 2020.]

My question is what are we allowed to do with A's 2021 losses? 

1. C has to use its own losses c/f before group losses doesn't it?

2. Can B carry back £200 or £50 of A's losses? I don't think you can carry back group losses?

3. Group relief c/f - can we split the £500 (or the balance from anything we can currently use) and group relieve it to B&C to be used at a future date?

4. Anything else?



Replies (6)

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By Michael Beaver
25th Jan 2022 16:03

I would carry back all of B's profits into 2020 and 2019 (which is allowed due to the special Covid measures of losses being allowed to be carried back three years).

I'd do the same for C's profits to utilise £200 of the profits.

I'd then transfer £100 loss from A to C to offset C's remaining profits for the year. A will have £400 of losses to carry forward.

Before doing that though, just make sure there aren't further profits in 2018 that the loss can be carried back under the Covid 3 year rule.

From memory, A can transfer its carried forward losses within the group in a future year. This used to not be allowed, but changed not too many years ago.

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My photo
By Matrix
25th Jan 2022 16:14

You have a lot of loss making group clients.

2. Agreed.
3. Losses are surrendered against profits, they aren’t transferred if that is what you mean by group relief, so would be carried forward in A then surrendered if such profits arise.

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Replying to Matrix:
By atleastisoundknowledgable...
25th Jan 2022 16:19

Matrix wrote:

You have a lot of loss making group clients.

Ever heard the phrase "Turnover's vanity, profit's sanity"?

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paddle steamer
25th Jan 2022 16:23

Re A any profits in 2018 that a terminal loss claim might reach?

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Replying to DJKL:
By atleastisoundknowledgable...
25th Jan 2022 16:35

no - after looking at it, 2019 was the first year

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By atleastisoundknowledgable...
25th Jan 2022 16:26

Thanks, as I suspected. Thanks also for the tip re 2018 figures.

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