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HMRC internal manual

Company Taxation Manual

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HM Revenue & Customs
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Consortia: group relief: Control arrangements: claimant is company owned by the consortium

CTA10/S146B

This is an anti-avoidance rule introduced that applies to claims for accounting periods beginning on or after 12 July 2010, which aims to prevent a member of a consortium joining a consortium merely to sell its, or its fellow group company’s losses.

CTA10/S146B applies where:

  • the claim has been made by a company owned by a consortium from a member of the consortium (consortium condition 1) or by a company owned by a consortium from a company in the same group as a member of the consortium (consortium condition 3), and,
  • arrangements are in place for any part of the period when the loss arose which enable a person to prevent the claimant company or link company, either alone or together with one or more other companies that are also members of the consortium, from controlling the claimant company, and,
  • were it not for S146B the claimant company or link company, alone or together with one or more other companies that are also members of the consortium would control the claimant company, and
  • the arrangements form part of a scheme the main purpose, or one of the main purposes, of which is to enable the claimant company to obtain a tax advantage (defined at CTA10/S1139) under CTA10/Part 5/Chapter 4.

In these circumstances, CTA10/S146B(4) reduces the group relief to be given on the claim to 50% of what it would be but for this section. This reduction should be carried out once the total profits for the overlapping period have been determined by reference to CTA10/S140(2).