CTM05140 - Corporation tax: restriction on relief for carried-forward losses: deductions allowance for a company in a group for a whole accounting period

CTA10/S269ZR to CTA10/S269ZV

A group of companies has a single deductions allowance known as the group deductions allowance (CTM05190). For these purposes, a group is defined at CTA10/S269ZZB (CTM05160).

The amount of the group deductions allowance is £5 million per 12 month accounting period, reduced proportionately if the accounting period is less than 12 months (CTA10/S269ZR(2) and (4)(b)).

The allowance is allocated amongst group members using the group allowance allocation statement (CTM05200), which is submitted by the group’s nominated company (CTM05180).

The group has free choice as to how its deductions allowance is divided between group members, so long as none of its members exceeds the maximum total allowance that may be allocated to a company. This is £5 million for a 12 month accounting period (CTM05210).

Where a company is in one group for the whole of its accounting period, the company’s deductions allowance is the amount allocated to it on the allocation statement. The company then specifies its deductions allowance on its tax return (CTA10/S269ZZ).

If a company is in one group for the whole of its accounting period and is not allocated any deductions allowance by the group, the company has a deductions allowance of nil.