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HMRC internal manual

Company Taxation Manual

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HM Revenue & Customs
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Consortia: group relief: diagram showing meaning of various terms

The percentages shown in this diagram indicate beneficial ownership of ordinary share capital and you should assume that the arrangements rules (CTA10/Ss146A, 146B, and 155) do not apply.

The votes and entitlement to profits and assets on winding up follow the shareholdings shown (see CTA10/Ss151(4) for the 75%+ and 90%+ subsidiaries (CTM80535), and Ss143(3) and 144(3) for the ownership proportions of L and X in CH (CTM80540 and CTM80545)).

L and X are members of the consortium (CTM80530). L is also a link company (CTM80550).

As CH’s business is wholly or mainly the holding of shares or securities in 90% trading subsidiaries it is a directly owned holding company, which is a company owned by the consortium (CTM80530).

Because the business of CT1, CT2, and CT3 is wholly or mainly the carrying on of a trade, they too are companies owned by the consortium for the purposes of CTA10/SS132 and 133 (CTM80550).

CH, CT1, CT2, and CT3 are also members of a group of companies for the purpose of CTA10/Ss148 and 149 (CTM80580 and CTM80585). Claims and surrenders of group relief between them should be taken into account in calculating the group’s potential relief for the purposes of CTA10/Ss148 and 149.

P, L, S1, and S2 are also members of a group. This makes P, S1, and S2 members of the same group of companies as the link company for the purposes of CTA10/S133 (CTM80550). Claims and surrenders of group relief between them should be taken into account in calculating the group’s potential relief for the purposes of CTA10/Ss148 and 149.

Because the votes and entitlement to profits and assets on winding up follow the shareholdings shown in the diagram L’s ownership proportion of any amount surrenderable by CH is 60%, X’s is 40% (CTM80540).