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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Groups: group relief: meaning of excess management expenses

CTA10/S99(1)(f), CTA10/S103, CTA09/S1219, CTA10/S105

Excess management expenses can be surrendered and claimed as group relief (CTM80105).

This does not apply where the surrendering company carries on the business of life assurance (CTA09/S1223A).

Management expenses means expenses that are deductible for the surrender period under CTA09/S1219 (see CTM08150).

Management expenses are a ‘relevant amount’ for the group relief provisions, so can only be surrendered to the extent that the total of the surrendering company’s relevant amounts exceeds the ‘profit-related threshold’ (or ‘gross profit’ in surrendering periods ended before 20 March 2013; see CTA10/S105, CTM80142).  This is the case regardless of whether the surrendering company uses any of the relevant amounts against its own profits.

The calculation will need to take into account the prescribed order of surrender of relevant amounts (see CTM80143).

Excess management expenses does not include:

  • management expenses brought forward from another accounting period under CTA09/S1223, or
  • brought forward losses of a company with investment business, that ceases to carry on UK property business, that are treated as management expenses of the current period under CTA10/S63.

See the example at CTM80445 on surrender of excess management expenses.