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HMRC internal manual

Company Taxation Manual

Groups: group relief: non coinciding accounting periods or group relationships - unused part of the surrenderable amounts

CTA10/S139

CTA10/S139 defines “unused part of the surrenderable amounts” for the purpose of CTA10/S138 (CTM80210).

In particular, the rules cater for the cases where:

  • the surrendering company and the claimant company have different accounting periods or are not in a group relationship for the whole periods; or
  • there are multiple claims for the surrendering company’s losses and other amounts.
  • S139(1) defines the “unused part of the surrenderable amounts” as being equal to:
  • the surrenderable amount for the overlapping period, less,
  • the amount of prior surrenders for the overlapping period.

The meaning of “overlapping period” is given by CTA10/S142 (CTM80225).

Calculate the surrenderable amount for the overlapping period:

  • establish the surrendering company’s total losses and other amounts available for surrender (CTM80110) for its accounting period, then,
  • time-apportion that surrenderable amount to the overlapping period, by reference to the proportion of the surrender period included in the overlapping period.

Although the usual method of apportionment is time apportionment, under CTA10/S141(3), some other just and reasonable apportionment may be used if time apportionment would be unjust or unreasonable, see CTM80260.

Step 2

Once you have calculated this amount you will need to reduce it by any prior surrenders for the overlapping period (CTM80240).