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HMRC internal manual

Company Taxation Manual

Groups: group relief: group relief and partnerships

CTA10/S131, CTA10/Ss 132 and 133, CTA09/S1273(1)(c) and (2)(c)

Both the group condition and consortium conditions (CTA10/S131, and Ss132 and 133 respectively) 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.  This is because these partnerships are not bodies corporate.

Entites based outside the UK and classified as partnerships in their home territory may be ‘companies’ for the purposes of group relief; this will depend on the facts and circumstances of the particular entity, and is not dependent on the treatment in their home territory (INTM180020 can act as a starting point, but the circumstances must be considered in light of the specific group relief rules).

A partnership in England, Wales or Northern Ireland is not a legal person and cannot own assets, so the assets of the partnership are considered to be beneficially owned by the partners.  This will generally be in proportion to the members’ partnership shares, determined by the partnership agreement (see BIM82058 for more details on the property of partnerships).

A UK Limited Liability Partnership (LLP) is 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 the partnership as being held by the members as partnership property.  Therefore, 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, so an LLP can be “looked through” to establish a group relationship.  See BIM82100 for more details on LLPs.

Examples can be found here.