CTM82090 - Corporation Tax: Group relief for carried-forward losses: Overlapping period
CTA10/S188DG
One of the conditions for a claim for group relief is that there must be an overlapping period. This is the period that is common to the claim period and the surrender period and during which the group condition is met (CTA10/S188DG(1)). The amount of group relief for carried-forward losses that can be claimed or surrendered is arrived at by reference to the overlapping period.
If during any part of the overlapping period the group condition is not met, that part is excluded from the overlapping period (CTA10/S188DG(2)).
Claim period
This is the accounting period of the claimant company for which it claims group relief for carried-forward losses (CTA10/S188CB(2)).
Surrender period
This is the accounting period of the surrendering company to which the losses and other amounts have been carried forward (CTA10/S188BB(7)).
Example 1: group conditions are not met during the overlapping period
On 1 January 2018 A Ltd (claimant company) with a 12 month accounting period (AP) ending 31 May 2018 joins Group G, whose members include B Ltd (surrendering company). All have accounting periods ending 31 May.
A Ltd makes a claim for the AP ending 31 May 2018 (claim period) for B Ltd’s losses carried forward to the AP ending 31 May 2018 (surrendering period). The overlapping period is 5 months from 1 January 2018 to 31 May 2018, this being the common period in A Ltd and B Ltd’s APs to which the claim relates and when the group condition is met.
Although the claim and surrendering periods coincide entirely, both being 1 June 2017 to 31 May 2018, the group condition is not met until 1 January 2018 when A Ltd joined the group. Therefore 1 June 2017 to 31 December 2017 is excluded from the overlapping period.
Example 2: APs of the claimant and surrendering companies are not coincident
W Ltd (surrendering company) prepares its accounts for 12 months to 30 June. Y Ltd (claimant company) prepares its accounts for 12 months to 30 September. Y Ltd makes a claim for its AP ending 30 September 2018 in relation to losses carried forward by W Ltd. This is set out below:
| Company | Date | Date | Date |
|---|---|---|---|
| Y Ltd 9 (claimant) | - | APE 30/09/2018 | - |
| W Ltd (surrendering) | APE 30/06/2018 | - | APE 30/06/2019 |
W Ltd could surrender its losses carried forward limited to the overlapping period relating to each of its APs ended 30 June 2018 and 30 June 2019. The overlapping periods would be as follows:
- APE 30 June 2018 - 1 October 2017 to 30 June 2018
- APE 30 June 2019 - 1 July 2018 to 30 September 2018