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HMRC internal manual

Company Taxation Manual

Groups: group relief: group relief and partnerships

CTA10/S131, CTA10/S132 and 133, CTA09/S1273(1)(c) and (2)(c)

The group and consortium conditions (respectively CTA10/S131, and S132 with S133) establish that the group relief provisions can only apply to companies.  CTA10/S188 defines a company for group relief purposes as any body corporate.

General partnerships governed by the Partnership Act 1890 and Limited Partnerships registered under the Limited Partnership Act 1907 cannot claim or surrender group relief.  They are not bodies corporate.

Institutions organised outside the UK and considered to be partnerships in their home territory may be ‘companies’ for the purposes of group relief, depending on the facts and circumstances of the institution concerned.  Classification under UK law does not necessarily follow treatment in the home territory.  The classifications at INTM180020 may be helpful as a starting point, but the facts and circumstances must be considered in light of the specific group relief rules

A trading partnership in England, Wales or Northern Ireland has no legal personality and cannot own assets, so the assets of the partnership are treated as beneficially owned by the partners.  This will generally be in proportion to the members’ partnership shares, determined by the partnership agreement, but see BIM82058 for more details on the property of partnerships.

A UK Limited Liability Partnership (LLP) is by statute a body corporate, but is specifically excluded from the definition of company by CTA09/1273 (2)(c), so an LLP cannot claim or surrender group relief.  CTA09/S1273 (1)(c) treats the property of an LLP carrying on a trade or business with a view to profit as held by the members as partnership property.  It follows that for group relief purposes any ordinary share capital held by an LLP is treated as beneficially owned by the LLP members in the proportion of each member’s share in the LLP, and thus an LLP can be “looked through” to establish a group relationship.  See BIM82100 for more details on LLPs.

Similar principles apply to groups for the purposes of chargeable gains

Examples can be found here.