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HMRC internal manual

Corporate Finance Manual

Old rules: loan relationships: connection and bad debts: consortia


This guidance applies to periods of account beginning before 1 January 2005

Companies in a consortium may not have been connected under FA96/S87, so the restriction on bad debt relief in FA96/SCH9/PARA6 may not have applied. However, consortium members, like group companies, could also get double relief through a combination of bad debt and consortium relief. For this reason there were restrictions, in certain circumstances, on

  • the amount of bad debt relief that a company can have where there has been a claim to group relief, and
  • the amount of group relief that can be claimed where the company has had bad debt relief.

There are full details of the restrictions under the old rules for bad debts and consortium claims at CFM81300+.