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HMRC internal manual

Corporate Finance Manual

HM Revenue & Customs
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Old rules: loan relationships: consortia and bad debts: group relief

Amount of restriction: group relief

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

The amount of the bad debt restriction hinged on the group relief that each consortium member, or members of its group, claimed from the consortium company.


In Year 1, Porwin Ltd (owned 50% by Ulla (South) Ltd and 50% by Rewdon Manufacturing Ltd) had losses of £102,000 available to surrender.
The maximum amount of group relief that the Ulla group can claim, under ICTA88/S403C, was (and remains) the smaller of

  • 50% of the loss available to surrender (£51,000)
  • the amount of total profits as reduced by any other relief.

The same rules applied to the Rewdon group.