CTM80135 - Groups: group relief: meaning of UK property business loss
CTA10/S99(1)(e), CTA10/S102, CTA10/S105
A loss from a UK property business can be surrendered and claimed as group relief (CTM80105 and PIM4240). A UK property business loss means a loss made in a UK property business in the surrender period – CTA10/S102(1). CTA10/S102(2) provides that it does not include a loss brought forward but treated as made in the surrender period as a result of CTA10/S62(5). However, property business losses arising after 1 April 2017 that are carried forward may be relieved as group relief for carried forward losses (CTA10/Part 5A) (CTM82000).
A loss from a UK property business is a ‘relevant amount’ for the group relief provisions, so can only be surrendered to the extent that the total of the surrendering company’s relevant amounts exceeds the ‘profit-related threshold’ (or ‘gross profit’ in surrendering periods ended before 20 March 2013; see CTA10/S105, CTM80142). This is the case regardless of whether the surrendering company uses any of the relevant amounts against its own profits.
The calculation will need to take into account the prescribed order of surrender of relevant amounts (see CTM80143).
A non-commercial property loss is not eligible for relief under the loss relief rules. CTA10/S99(2) prevents the surrender of losses that are “not eligible for Corporation Tax relief”. So non-commercial property losses cannot be surrendered as group relief as they are excluded under CTA10/S64.