Annex 1: Minor changes in the law Change 25: Group relief: restriction of surrender by company owned by consortium: section 148 Example 2
The facts are the same as in Example 1 except that S’s accounting date is 30 September. The effect of section 413(2A) of ICTA is that, in relation to C’s accounting period ended 31 December 2009, S’s corresponding accounting period is the whole of the 12 months ended 30 September 2009.
The effect of section 405(2) of ICTA is that S is assumed to make a claim for group relief equal to the total of its profits of its entire accounting period ended 30 September 2009 (that is, its corresponding accounting period). Section 405 of ICTA does not provide for an apportionment of S’s profits, even though S could actually claim relief against no more than £1500, its profits attributable to the “overlapping period” (see section 403A of ICTA). So the £2000 restriction stands.
In section 148(5) the “maximum amount of group relief that could be given” on a claim by S may require an apportionment of S’s total profits. This makes no difference in Example 1. But in Example 2 C’s loss available for surrender is treated as reduced to £8500, instead of £8000.
This change is in taxpayers’ favour in principle and may benefit some in practice. But the numbers affected and the amounts involved are likely to be small.