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HMRC internal manual

Banking Manual

Bank loss restriction: definition of a group for purpose of bank loss restriction

Meaning of group - the legislation defining a banking company for the purpose of the bank loss restriction measure uses an accounting definition of a group.  A group comprises the parent company and all members of the group that are included in the consolidated financial statements at the time they are drawn up under International Accounting Standards (IAS) or US GAAP.

In practice this means where an entity is:

  • included in the parent’s consolidated financial statements drawn up under IAS, or
  • would have been included in the parent’s consolidated financial statements had these been drawn up under IAS the entity will be a member of that group for so much of its chargeable accounting period as falls in the period covered by the consolidated financial statements.

Joint venture companies  - CTA10/269CM

Where a company (‘the joint venturer’) together with one or more other persons, jointly controls another company that is a joint venture.   For the purposes of the bank loss restriction the joint venture company is treated as a member of any group of which the joint venturer is a member.  In practice this means a joint venture company can be a member of more than one group.