October 12, 2020


No group relief?

If you created a group of companies each owning 100% of the shares, this article is probably not for you! This article focuses on the basics of a group relief more commonly known as consortium relief.

What is a consortium-owned company?

• A trading company where at least 75% of its share capital is owned by more than one company, each company owning between 5% - 74% of its shares.

• If a consortium-owned company is itself a holding company owning at least 90% of the shares in a trading subsidiary, both companies can also form part of the consortium.

If a consortium member is part of a group e.g. a company that owns 10% of the shares in a consortium-owned company, is owned 75% or more by another company; this becomes a link company and can extend the relief into that group.

How much can be claimed?


what is a consortium owned company?

• D generates trading losses of £280,000 for the year ended 31/12/2019.

• A has pre-2017 trading losses brought forward, which clears its 2019 trading profits.

• B produces a profit of £370,000 for the year to 31/12/2019.

• C’s results to 31/12/2019 are £20,000.

A = no claim.

B = D can surrender £84,000 of losses.

C = D can surrender £20,000 of losses.

A, B, & C cannot surrender losses between themselves.


• If the year-ends of the consortium members are not the same, further restrictions apply to the loss surrenders.

• The introduction of relieving losses brought forward from 1st April 2017, adds further complexity to consortium claims.

• All members of the consortium must agree to any loss surrender or claim by the consortium- owned company.

• It is generally good practice for the claimant company to pay for the losses surrendered, at the prevailing tax rate e.g. £10,000 losses = payment of £1,900.

• Where the surrendering consortium-owned company does not have sufficient distributable reserves, non-payment for those losses may be deemed an illegal distribution under company law.

• Companies whose trading activity is dealing in shares cannot participate in this relief.

• Anti-avoidance provisions can preclude claims; several cases have been taken to the tax tribunal.

• If you are creating a new consortium, make sure you involve an experienced corporate solicitor to draft a comprehensive set of Articles and Shareholders’ Agreement, the terms should be reviewed by a tax professional if you would like to ensure the clauses do not fall foul of the anti-avoidance provisions.

As with all things with tax in its title, there is more complexity behind the above, but it is certainly a relief not to be forgotten!


Fill in the form and we’ll get back to you as soon as possible.

Proud to be associated with

Corporate finance
Chartered accountants
Somerset business award
Regional Top25 list logo South West
Accred 2023 2star
2023 Top25 Best Large Companies 1
2023 No1 Accountancy Firms Logo
B corp mid
Praxity white

What’s happening at AG.









Newsletter sign up

Sign up & stay informed.