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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Corporation Tax self assessment (CTSA): group relief - general: surrendered amount reduced

Under CTSA, as under CTPF, effect can be given to a group relief claim even if the surrendering company’s tax liability is not final.

Companies cannot surrender more as group relief than the total of the negative amounts available for surrender as group relief shown by their returns.

However, after a surrendering company has given one or more notices of consent, the amount it has available may be reduced to less than the total of the amounts previously surrendered. In that case, the total group relief allowed has to be brought within the total of the amount available for surrender.

FA98/SCH18/PARA75 (2) requires the company to withdraw one or more notices of consent so as to bring the total amount surrendered within the new amount available for surrender. If appropriate, the company can give one or more new notices. It must do all this within 30 days after the date on which the amount available for surrender is reduced.

The notice(s) must be in writing (Paragraph 75 (3)), and copies must be sent to each of the companies affected, and to the relevant Tax Office(s).

When the surrendering company fails to take action under Paragraph 75 (2), you may direct which claims are to be ineffective or to have effect in a lower figure. You must only exercise this power to the extent necessary to bring the total amount surrendered as group relief within the total of the amount available for surrender (Paragraph 75 (4)).

You must make the direction by notice to the surrendering company and send a copy of the notice to each claimant company affected at the same time.

If a claimant company receiving such a notice is within time to amend its return for the accounting period for which less or no group relief is now available, it must do so (Paragraph 75 (6)).

The surrendering company may appeal against a direction given under Paragraph 75 (4). The appeal must be made:

  • in writing,
  • within 30 days of the notice being issued, and
  • to the Tax Office that issued the notice.

Under FA98/SCH18/PARA76 you can make an assessment to recover group relief which:

  • was excessive when it was given, or
  • has become excessive as a result of a reduction in the amount of group relief available for surrender.