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HMRC internal manual

Company Taxation Manual

Residence: dual resident companies: anti-avoidance - limitation of group relief

Losses or other amounts are not available for set-off under the group relief provisions if the company that would be the surrendering company is a dual resident investing company. Group relief is denied in respect of amounts listed at CTA10/S99 (1), namely

  • a trading loss
  • a capital allowance excess
  • a non trading loan relationships deficit
  • amounts allowable as qualifying charitable donations
  • a UK property business loss
  • management expenses, and
  • a non-trading loss on intangible fixed assets.


A, B and C are companies in a multinational group.

A is UK incorporated and UK resident.

B is a dual resident investing company and is US incorporated and UK resident.

C is US incorporated and US resident.

A and B are members of a UK sub-group.

B and C are members of a US sub-group.

A and C each have profits of £100.

B has a loss of £100.

In the past years B could set its loss against A’s profits, as well as against C’s profits (and so obtain relief of £200 altogether).

Under CTA10/S109 (2) B’s loss is not available for set-off against A’s profits.