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HMRC internal manual

Company Taxation Manual

Consortia: group relief: meaning of ‘members of the consortium’ and ‘company owned by a consortium’


A consortium comprises the ‘members of the consortium’. For the purposes of group/consortium relief they must:

  • between them beneficially own at least 75% of the ordinary share capital of the company directly owned by the consortium (CTA10/S153(1)), and
  • each beneficially own at least 5% of the ordinary share capital of the company directly owned by the consortium (CTA10/S153(2)).

The company owned by the consortium may be:

  • a directly owned trading company (CTA10/Ss132, 133, and 185), or
  • a directly owned holding company whose business consists wholly or mainly in the holding of the shares or securities of directly held 90% trading subsidiaries (CTM80535). (CTA10/Ss132, 133, and 185), or
  • a trading company which is a direct 90% subsidiary (CTM80535) of such a holding company (CTA10/Ss132, 133, and 153(3)).

There is a diagram showing the meaning of these terms at CTM80590.

The company directly owned by the consortium must not be a 75% subsidiary of any one company. The 90% trading subsidiaries of the holding company must not be 75% subsidiaries of any other company (CTA10/S153(3)(a)). Either of these situations could create a relationship between the respective parties that meets the group condition (CTA10/S131) and all relief must be claimed or surrendered by way of the group relationship and no relief may be claimed or surrendered by virtue of the consortium relationship.

Consortium claims may be made both by the members of the consortium and by companies owned by the consortium if the conditions in ‘consortium condition 1’ (CTA10/S132) are fulfilled. Consortium relief can pass both ‘upwards’ and ‘downwards’ (CTM80545).

A consortium claim cannot be made if a profit on the sale of the shares held by the member in the company directly owned by the consortium would be a trading receipt (CTA10/Ss132(4) and 133(3)). The fact that a company that holds the shares of the surrendering or holding company on trading account is a member of the consortium does not preclude claims by the other companies.

Subject to certain conditions, consortium relief also extends to claims and surrenders made by a company that is in the same group as a member of the consortium, if the conditions in consortium condition 2 (CTA10/S133(1)) or consortium condition 3 (CTA10/S133(2)) are fulfilled. There is guidance on this at CTM80550 onwards.

References to ownership of shares and securities are references to beneficial ownership (CTA10/S153(1)(b)).

References to ordinary share capital are to ordinary share capital as defined by CTA10/S1119.