Group relief (UK corporation tax)
Group relief permits a surrendering company’s eligible losses or other amounts to be deducted from a claimant company’s available total profits when the statutory relationship, period and claim conditions are met. A qualifying 75% group relationship involves share ownership and additional rights tests. The companies’ accounting periods need not be identical, but only overlapping periods and the applicable limits are relevant. Carried-forward losses have separate conditions; the TX guide excludes overseas-subsidiary trading losses and consortia.
Worked example
Two UK companies meet the qualifying group and period conditions. One has an eligible £30,000 current-period trading loss and the other has £50,000 available profits. If the entire £30,000 is properly surrendered and claimed, and no other limit applies, the claimant’s relevant profits fall to £20,000.
Common mistake
Assuming any common ownership permits relief, or that non-overlapping accounting periods allow the whole loss to be surrendered.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Direct | June 2026–June 2027 |