Introduction Equity holders Overview
406.This Chapter makes the United Kingdom group relief rules compatible with European Community law following the judgment in Marks and Spencer plc v Halsey, C446/03(1). That case decided that in some circumstances it is contrary to the provisions of the EC Treaty on freedom of establishment to deny group relief to a UK resident parent for the losses of a non-UK resident subsidiary.
407.So this Chapter allows relief for foreign losses. But there are two main restrictions:
	the surrendering company must be resident in (or otherwise “related” to) an EEA territory; and
	the losses must not qualify for relief in the EEA territory.