This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Company Taxation Manual

Groups: group relief: overseas permanent establishment of UK resident company

CTA10/S106, CTA10/S188BH

From 1 April 2000, there is a restriction on the losses and other amounts (CTM80110) that can be surrendered as group relief by a UK resident company that trades through an overseas permanent establishment.

The loss or other amount cannot be surrendered as group relief in so far as it:

  • is attributable to the overseas permanent establishment (CTM80355), and
  • any part of the loss or other amount so attributable is or represents an amount for which tax relief may be against non-UK profits of someone other than the UK company (CTM80360).

From 19 July 2011, a UK resident company can elect to exempt the results of its overseas permanent establishments from corporation tax.  If such a election is made then the losses from the company’s overseas permanent establishments will not be available for relief.  If the company chooses not to make an election then there is no change to the rules explained above.  A summary of this exemption is at INTM281010.

From 1 April 2017, similar rules apply for group relief for carried-forward losses at CTA10/S188BH.