How does group relief work for corporation tax losses?
Answered 11 March 2026
Group Relief for Corporation Tax Losses
What the law says
Overview and Purpose
Group relief is governed by Part 5 of the Corporation Tax Act 2010 (CTA 2010). It allows a company to surrender losses and other amounts, enabling other companies in the same group or consortium to claim corporation tax relief for those surrendered amounts. The relief is called "group relief".
What Can Be Surrendered
Under CTA 2010 s.99, a company may surrender the following for an accounting period:
- (a) A trading loss
- (b) A capital allowance excess
- (c) A non-trading deficit on a loan relationship (Chapter 16/16A of Part 5, CTA 2009)
- (d) Amounts allowable as qualifying charitable donations
- (e) A UK property business loss
- (f) Management expenses
- (g) A non-trading loss on intangible fixed assets
The company may surrender these amounts so far as they are eligible for corporation tax relief (apart from Part 5 itself). Importantly, losses within (a)–(c) may be surrendered even if the surrendering company has other profits in the same period from which they could be deducted.
Group Membership — The "Group Condition"
Under CTA 2010 s.152, two companies are members of the same group of companies if:
- one is the 75% subsidiary of the other, or
- both are 75% subsidiaries of a third company
Under CTA 2010 s.131, the group condition is met if the surrendering company and the claimant company:
- are members of the same group of companies (per s.152), and
- are both UK related
Making a Claim
Under CTA 2010 s.130, a claimant company may make a claim for group relief for an accounting period ("the claim period") if the following requirements are met:
- Requirement 1: The surrendering company consents to the claim
- Requirement 2: There is an overlapping period common to both the claim period and the surrender period
- Requirement 3: During the overlapping period, the group condition (or a consortium condition) is met
More than one company may make a claim in relation to the same surrenderable amounts.
How Relief is Given
Under CTA 2010 s.137, group relief is given by making a deduction from the claimant company's total profits of the claim period. The amount of the deduction equals the surrendering company's surrenderable amounts (or the part claimed). This deduction is made before deductions for certain carry-back reliefs, but after all other Step 2 deductions.
Crucially, corporation tax relief cannot be given more than once for the same amount — whether by giving group relief and another relief to the surrendering company, or by giving group relief more than once.
Consortium Relief
Where companies are connected via a consortium rather than a group, relief is available under consortium conditions 1–3 (CTA 2010 ss.132–133). In consortium cases, the relief is limited to the claimant's ownership proportion — i.e., the lowest of: the proportion of ordinary share capital beneficially owned, the proportion of distributable profits, the proportion of assets on winding up, and the proportion of voting power.
Payments Between Group Companies
Under CTA 2010 s.183, where the surrendering and claimant companies agree on the surrendered amounts and the claimant makes a payment to the surrendering company not exceeding those amounts, that payment:
- is not taken into account in determining either company's profits or losses for CT purposes, and
- is not treated as a distribution
Group Relief for Carried-Forward Losses
Part 5A of CTA 2010 provides a parallel regime — group relief for carried-forward losses — allowing the surrender of losses that have been carried forward (as opposed to current-year losses under Part 5). The same tax-neutral payment treatment applies under s.188FA.
HMRC Guidance / Practice
No HMRC manual or guidance sources were returned in the searches conducted. For HMRC's practical guidance on group relief, you should consult the Corporate Intangibles Research and Development Manual (CIRD) and, in particular, the Company Taxation Manual (CTM) at CTM80000 onwards, which covers HMRC's operational approach to group relief claims, including the mechanics of consent, time limits under Schedule 18 FA 1998, and how HMRC handles excessive group relief claims.
Citation sources
or 269ZD(2) of Part 7ZA (restrictions on deductions for carried-forward losses and other amounts) could apply. 6 For the purposes of subsection (4)(b) it is to be assumed that the claimant company has claimed all relief available to it for the claim period under section 37 of this Act or section 260(3) of CAA 2001. 7 Corporation tax relief is not to be given more than once for the same amount, whether— a by giving group relief and by giving some other relief (for any accounting period) to the su
Part 5 Group relief Chapter 7 Miscellaneous provisions and interpretation of Part Miscellaneous Payments for group relief 183 1 This section applies if— a the surrendering company and the claimant company have an agreement between them in relation to losses and other amounts of the surrendering company (“the agreed loss amounts”), b group relief is given to the claimant company in relation to the agreed loss amounts, and c as a result of the agreement the claimant company makes a payment to the
Part 5 Group relief Chapter 1 Introduction Introduction to Part 97 1 This Part— a allows a company to surrender losses and other amounts, and b enables, in certain cases involving groups or consortiums of companies, other companies to claim corporation tax relief for the losses and other amounts that are surrendered. 2 The corporation tax relief mentioned in subsection (1) is called “group relief”. 3 Chapter 2 allows a company within the charge to corporation tax to surrender losses and other am
PART 5A Group relief for carried-forward losses CHAPTER 6 Miscellaneous provisions and interpretation of Part Miscellaneous Payments for group relief for carried-forward losses 188FA 1 This section applies if— a the surrendering company and the claimant company have an agreement between them in relation to losses and other amounts of the surrendering company (“the agreed loss amounts”), b group relief for carried-forward losses is given to the claimant company in relation to the agreed loss amou
Part 5 Group relief Chapter 4 Claims for group relief Surrenderable amounts under Chapter 2 The group condition 131 1 The group condition is met if the surrendering company and the claimant company— a are members of the same group of companies (see section 152), and b are both UK related. 2 For the meaning of “UK related” in subsection (1)(b) and in sections 132 and 133, see section 134.
Part 5 Group relief Chapter 4 Claims for group relief Giving of group relief Deduction from total profits 137 1 If the claimant company makes a claim as mentioned in section 130 ..., the group relief is given by the making of a deduction from the claimant company's total profits of the claim period. 2 The amount of the deduction is— a an amount equal to the surrendering company's surrenderable amounts for the surrender period, or b if the claim is in relation to only part of those amounts, an am
Part 5 Group relief Chapter 5 Subsidiaries, groups and consortiums Explanations of terms Groups of companies 152 For the purposes of this Part two companies are members of the same group of companies if— a one is the 75% subsidiary of the other, or b both are 75% subsidiaries of a third company.
Part 5 Group relief Chapter 2 Surrender of company's losses etc for an accounting period Basic provisions about surrendering losses and other amounts Surrendering of losses and other amounts 99 1 This section applies if a company has one or more of the following for an accounting period— a a trading loss (see section 100), b a capital allowance excess (see section 101), c a deficit within Chapter 16 or 16A of Part 5 of CTA 2009 (non-trading deficit on loan relationship), d amounts allowable as q