Finance Act 1998

Part VIII U.K. Claims for group relief

Modifications etc. (not altering text)

C1 Sch. 18 Pt. VIII (except paras. 70(4), 71(4)) applied (with modifications) (23.11.1999) by S.I. 1999/2975, reg. 10(3)

Sch. 18 Pt. VIII (except para. 77) applied (28.7.2000) by 2000 c. 17, s. 82, Sch. 22 Pt. IX para. 81(3)

Introduction U.K.

66 U.K. This Part of this Schedule applies to claims for relief under Chapter IV of Part X of the Taxes Act 1988 (group relief).

Claim to be included in company tax return U.K.

67 (1) A claim for group relief must be made by being included in the claimant company’s company tax return for the accounting period for which the claim is made. U.K.

(2) It may be included in the return originally made or by amendment.

Modifications etc. (not altering text)

C2 Sch. 18 para. 67 applied (with modifications) (31.3.2001 with effect as mentioned in reg. 1(2) of the amending S.I.) by S.I. 2001/1163, regs. 1, 8

Content of claims U.K.

68 (1) A claim for group relief must specify— U.K.

(a) the amount of relief claimed, and

(b) the name of the surrendering company.

(2) The amount specified must be an amount which is quantified at the time the claim is made.

[F1 (3) A claim for group relief must also state whether or not there is a company mentioned in sub-paragraph (4) that was not resident in the United Kingdom in either or both of the following periods—

(a) the accounting period of the surrendering company to which the surrender relates,

(b) the corresponding accounting period of the claimant company.

F1 (4) Those companies are the claimant company, the surrendering company and any other company by reference to which—

(a) the claimant company and the surrendering company are members of the same group, or

(b) the conditions specified in section 402(3) of the Taxes Act 1988 for the making of the claim are satisfied in the case of the claimant company and the surrendering company.]

Textual Amendments

F1 Sch. 18 para. 68(3)(4) inserted (28.7.2000 with effect as mentioned in Sch. 27 para. 12(1) of the amending Act) by 2000 c. 17, s. 97, Sch. 27 Pt. II para. 11

Modifications etc. (not altering text)

C3 Sch. 18 para. 68 applied (with modifications) (31.3.2001 with effect as mentioned in reg. 1(2) of the amending S.I.) by S.I. 2001/1163, regs. 1, 8

Claims for more or less than the amount available for surrender U.K.

69 (1) A claim for group relief may be made for less than the amount available for surrender at the time the claim is made. U.K.

(2) A claim is ineffective if the amount claimed exceeds the amount available for surrender at the time the claim is made.

(3) For these purposes the amount available for surrender at any time is calculated as follows.

• First step

• Determine the total amount available for surrender under section 403 of the Taxes Act 1988—

(a) on the basis of the information in the company’s company tax return, and

(b) disregarding any amendments whose effect is deferred under paragraph 31(3).

• Second step

• Then deduct the total of all amounts for which notices of consent have been given by the company and not withdrawn.

(4) Where one or more claims are withdrawn on the same day as one or more claims are made, the withdrawals are given effect first.

(5) Where more than one claim is made on the same day, and the claims together take the amount claimed over the limit of what is available for surrender, [F2 an officer of Revenue and Customs] may determine which of the claims is to be ineffective.

(6) The power under sub-paragraph (5) shall not be exercised to any greater extent than is necessary to bring the total amount claimed within the amount available for surrender.

Textual Amendments

F2 Words in Sch. 18 substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(a); S.I. 2005/1126, art. 2(2)(h)

Consent to surrender U.K.

70 (1) A claim for group relief requires the consent of the surrendering company. U.K.

(2) A consortium claim also requires the consent of each member of the consortium.

(3) The necessary consent or consents must be given—

(a) by notice in writing,

(b) to the officer of the Board to whom the surrendering company makes its company tax returns,

(c) at or before the time the claim is made.

Otherwise the claim is ineffective.

(4) A claim for group relief is ineffective unless it is accompanied by a copy of the notice of consent to surrender given by the surrendering company.

(5) A consortium claim is ineffective unless it is also accompanied by a copy of the notice of consent to surrender given by each member of the consortium.

Modifications etc. (not altering text)

C4 Sch. 18 para. 70(1)(3)(4) applied (with modifications) (31.3.2001 with effect as mentioned in reg. 1(2) of the amending S.I.) by S.I. 2001/1163, regs. 1, 8

Notice of consent U.K.

71 (1) Notice of consent by the surrendering company must contain all the following details— U.K.

(a) the name of the surrendering company;

(b) the name of the company to which relief is being surrendered;

(c) the amount of relief being surrendered;

(d) the accounting period of the surrendering company to which the surrender relates;

(e) the tax district references of the surrendering company and the company to which relief is being surrendered.

Otherwise the notice is ineffective.

(2) Notice of consent may not be amended, but it may be withdrawn and replaced by another notice of consent.

(3) Notice of consent may be withdrawn by notice to the officer of the Board to whom the notice of consent was given.

(4) Except where the consent is withdrawn under paragraph 75 (withdrawal in consequence of reduction of amount available for surrender), the notice of withdrawal must be accompanied by a notice signifying the consent of the claimant company to the withdrawal.

Otherwise the notice is ineffective.

(5) The claimant company must, so far as it may do so, amend its company tax return for the accounting period for which the claim was made so as to reflect the withdrawal of consent.

Modifications etc. (not altering text)

C5 Sch. 18 para. 71 applied (with modifications) (31.3.2001 with effect as mentioned in reg. 1(2) of the amending S.I.) by S.I. 2001/1163, regs. 1, 8

Notice of consent requiring amendment of return U.K.

72 (1) Where notice of consent by the surrendering company is given after the company has made a company tax return for the period to which the surrender relates, the surrendering company must at the same time amend its return so as to reflect the notice of consent. U.K.

(2) Where notice of consent by the surrendering company relates to a loss in respect of which relief has been given under section 393(1) of the Taxes Act 1988 (carry forward of trading losses), the surrendering company must at the same time amend its company tax return for the period or, if more than one, each of the periods in which relief for that loss has been given under section 393(1) so as to reflect the new notice of consent.

For this purpose relief under section 393(1) is treated as given for losses incurred in earlier accounting periods before losses incurred in later accounting periods.

(3) The time limits otherwise applicable to amendment of a company tax return do not prevent an amendment being made under sub-paragraph (1) or (2).

(4) If the surrendering company fails to comply with sub-paragraph (1) or (2), the notice of consent is ineffective.

Modifications etc. (not altering text)

C6 Sch. 18 para. 72(1)(4) applied (with modifications) (31.3.2001 with effect as mentioned in reg. 1(2) of the amending S.I.) by S.I. 2001/1163, regs. 1, 8

Withdrawal or amendment of claim U.K.

73 (1) A claim for group relief may be withdrawn by the claimant company only by amending its company tax return. U.K.

(2) A claim for group relief may not be amended, but must be withdrawn and replaced by another claim.

Modifications etc. (not altering text)

C7 Sch. 18 para. 73 applied (with modifications) (31.3.2001 with effect as mentioned in reg. 1(2) of the commencing Regulations) by S.I. 2001/1163, regs. 1, 8

Time limit for claims U.K.

74 (1) A claim for group relief may be made or withdrawn at any time up to whichever is the last of the following dates— U.K.

(a) the first anniversary of the filing date for the company tax return of the claimant company for the accounting period for which the claim is made;

(b) if notice of enquiry is given into that return, 30 days after the enquiry is completed;

(c) if after such an enquiry [F2 an officer of Revenue and Customs] [F3 amends] the return under paragraph 34(2), 30 days after notice of the amendment is issued;

(d) if an appeal is brought against such an amendment, 30 days after the date on which the appeal is finally determined.

(2) A claim for group relief may be made or withdrawn at a later time if [F2 an officer of Revenue and Customs] [F3 allows] it.

(3) The time limits otherwise applicable to amendment of a company tax return do not apply to an amendment to the extent that it makes or withdraws a claim for group relief within the time allowed by or under this paragraph.

(4) The references in sub-paragraph (1) to an enquiry into a company tax return do not include an enquiry restricted to a previous amendment making or withdrawing a claim for group relief.

An enquiry is so restricted if—

(a) the scope of the enquiry is limited as mentioned in paragraph 25(2), and

(b) the amendment giving rise to the enquiry consisted of the making or withdrawing of a claim for group relief.

Textual Amendments

F2 Words in Sch. 18 substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(a); S.I. 2005/1126, art. 2(2)(h)

F3 Words in Sch. 18 substituted (18.4.2005) by virtue of Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(c); S.I. 2005/1126, art. 2(2)(h)

Modifications etc. (not altering text)

C8 Sch. 18 para. 74 applied by Income and Corporation Taxes Act 1988 (c. 1), Sch. 19B para. 15(3) (as inserted (22.7.2004) by Finance Act 2004 (c. 12), Sch. 38)

C9 Sch. 18 para. 74 applied by Income and Corporation Taxes Act 1988 (c. 1), Sch. 19C paras. 14(2), 15(3) (as inserted (19.7.2006) by Finance Act 2006 (c. 25), Sch. 19)

Reduction in amount available for surrender U.K.

75 (1) This paragraph applies if, after the surrendering company has given one or more notices of consent to surrender, the [F4 total amount available for surrender] is reduced to less than the amount stated in the notice, or the total of the amounts stated in the notices, as being surrendered. U.K.

(2) The company must within 30 days withdraw the notice of consent, or as many of the notices as is necessary to bring the total amount surrendered within the new [F5 total] amount available for surrender, and may give one or more new notices of consent.

(3) The company must give notice in writing of the withdrawal of consent, and send a copy of any new notice of consent—

(a) to each of the companies affected, and

(b) to [F2 an officer of Revenue and Customs].

(4) If the surrendering company fails to act in accordance with sub-paragraph (2), [F2 an officer of Revenue and Customs] may by notice to the surrendering company give such directions as [F3 he thinks] fit as to which notice or notices are to be ineffective or are to have effect in a lesser amount.

This power shall not be exercised to any greater extent than is necessary to secure that the total amount stated in the notice or notices is consistent with the [F5 total] amount available for surrender.

(5) [F2 An officer of Revenue and Customs] must at the same time send a copy of the notice to the claimant company, or each claimant company, affected by [F3 his] action.

(6) A claimant company which receives—

(a) notice of the withdrawal of consent, or a copy of a new notice of consent, under sub-paragraph (3), or

(b) a copy of a notice containing directions by [F2 an officer of Revenue and Customs] under sub-paragraph (4),

must, so far as it may do so, amend its company tax return for the accounting period for which the claim is made so that it is consistent with the new position with regard to consent to surrender.

(7) An appeal may be brought by the surrendering company against any directions given by [F2 an officer of Revenue and Customs] under sub-paragraph (4).

(8) Notice of appeal must be given—

(a) in writing,

(b) within 30 days after the notice containing the directions was issued,

(c) to the officer of the Board by whom the notice was given.

Textual Amendments

F2 Words in Sch. 18 substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(a); S.I. 2005/1126, art. 2(2)(h)

F3 Words in Sch. 18 substituted (18.4.2005) by virtue of Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(c); S.I. 2005/1126, art. 2(2)(h)

F4 Words in Sch. 18 para. 75(1) substituted (27.7.1999 with effect in relation to accounting periods ending on or after 1.7.1999) by 1999 c. 16, s. 92(2)(a)(7)

F5 Words in Sch. 18 para. 75(2)(4) inserted (27.7.1999 with effect in relation to accounting periods ending on or after 1.7.1999) by 1999 c. 16, s. 92(2)(b)(7)

Modifications etc. (not altering text)

C10 Sch. 18 para. 75 applied (with modifications) (31.3.2001 with effect as mentioned in reg. 1(2) of the commencing Regulations) by S.I. 2001/1163, regs. 1, 8

F6 [Assessment on other claimant companies] U.K.

Textual Amendments

F6 Sch. 18 para. 75A and crossheading inserted (27.7.1999 with effect in relation to accounting periods ending on or after 1.7.1999) by 1999 c. 16, s. 92(3)(7)

[F7 75A (1) This paragraph applies where, after the surrendering company has given notice of consent to surrender, a claimant company (“the chargeable company”) has become liable to tax in consequence of receiving— U.K.

(a) notice of the withdrawal of consent, or a copy of a new notice of consent, under paragraph 75(3), or

(b) a copy of a notice containing directions by [F2 an officer of Revenue and Customs] under paragraph 75(4).

(2) If any of the tax is unpaid six months after the chargeable company’s time limit for claims, [F2 an officer of Revenue and Customs] may make an assessment to tax in the name of the chargeable company on any other company that has obtained group relief as a result of the surrender.

(3) The assessment may not be made more than two years after that time limit.

(4) The amount of the assessment must not exceed—

(a) the amount of the unpaid tax, or

(b) if less, the amount of tax which the other company saves by virtue of the surrender.

(5) A company assessed to an amount of tax under sub-paragraph (2) is entitled to recover from the chargeable company—

(a) a sum equal to that amount, and

(b) any interest on that amount which it has paid under section 87A of the M1 Taxes Management Act 1970 (interest on unpaid corporation tax).

(6) For the purposes of this paragraph the chargeable company’s time limit for claims is the last of the dates mentioned in paragraph 74(1) on which the chargeable company could make or withdraw a claim for group relief for the accounting period for which the claim in question is made.]

Textual Amendments

F2 Words in Sch. 18 substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(a); S.I. 2005/1126, art. 2(2)(h)

F7 Sch. 18 Pt. VIII para. 75A inserted (27.7.1999 with effect in relation to accounting periods ending on or after 1.7.1999) by 1999 c. 16, s. 92(3)(7)

Modifications etc. (not altering text)

C11 Sch. 18 para. 75A applied (with modifications) (31.3.2001 with effect as mentioned in reg. 1(2) of the commencing Regulations) by S.I. 2001/1163, regs. 1, 8

Marginal Citations

M1 1970 c.9.

Assessment to recover excessive group relief U.K.

76 (1) If [F2 an officer of Revenue and Customs] [F3 discovers] that any group relief which has been given is or has become excessive, [F3 he] may make an assessment to tax in the amount which in [F3 his] opinion ought to be charged. U.K.

(2) This power is without prejudice to—

(a) the power to make a discovery assessment under paragraph 41(1);

(b) the making of all such adjustments by way of discharge or repayment of tax or otherwise as may be required where a claimant company has obtained too much relief, or a surrendering company has forgone relief in respect of a corresponding amount.

F8 [(3) If an assessment under this paragraph is made because a claimant company fails, or is unable, to amend its company tax return under paragraph 75(6), the assessment is not out of time if it is made within one year from—

(a) the date on which the surrendering company gives notice of the withdrawal of consent, or (if later) sends a copy of a new notice of consent, to the claimant company under paragraph 75(3), or

(b) the date on which [F2 an officer of Revenue and Customs] [F3 sends] the claimant company a copy of a notice containing [F3 his] directions under paragraph 75(4).]

Textual Amendments

F2 Words in Sch. 18 substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(a); S.I. 2005/1126, art. 2(2)(h)

F3 Words in Sch. 18 substituted (18.4.2005) by virtue of Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(c); S.I. 2005/1126, art. 2(2)(h)

F8 Sch. 18 para. 76(3) added (27.7.1999 with effect in relation to accounting periods ending on or after 1.7.1999) by 1999 c. 16, s. 92(4)(7)

Modifications etc. (not altering text)

C12 Sch. 18 para. 76 applied (with modifications) (31.3.2001 with effect as mentioned in reg. 1(2) of the amending S.I.) by S.I. 2001/1163, regs. 1, 8

Joint amended returns U.K.

77 (1) The Treasury may by regulations make provision for arrangements under which— U.K.

(a) a claim for group relief may be made without being accompanied by a copy of the notice of consent to surrender given by the surrendering company [F9 , provided authority for the claim being so made is given by a company which is authorised in relation to the claimant company as mentioned in paragraph (b)], and

(b) one company may be authorised to act on behalf of two or more companies in the same group in amending their company tax returns for the purpose of claiming or surrendering group relief or revising the amounts of group relief claimed or surrendered by them.

(2) Regulations under this paragraph may add to, exclude or modify the operation of any provisions of this Part of this Schedule to such extent as the Treasury think necessary or expedient for the purpose of, or in connection with, such arrangements.

(3) Provision may in particular be made—

(a) altering the conditions for making and withdrawing claims for group relief, and

(b) giving [F2 an officer of Revenue and Customs] power to recover from the authorised company or another company in the group any amount which might be recovered from the claimant company by an assessment under paragraph 76.

Textual Amendments

F2 Words in Sch. 18 substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(a); S.I. 2005/1126, art. 2(2)(h)

F9 Words in Sch. 18 para. 77(1)(a) inserted (28.7.2000) by 2000 c. 17, s. 99

[F10 Claims in respect of overseas losses of non-resident companies U.K.

Textual Amendments

F10 Sch. 18 para. 77A and cross-heading inserted (with effect in accordance with Sch. 1 para. 9 of the amending Act) by Finance Act 2006 (c. 25), Sch. 1 para. 8

77A (1) This paragraph applies if a claim for group relief is made in respect of any loss or other amount as a result of the condition in section 402(2A) of the Taxes Act 1988 being satisfied (relief in respect of overseas losses of non-resident companies). U.K.

(2) In relation to the surrendering company, this Part of this Schedule applies as if—

(a) references to the relief being surrendered were to the EEA amount and to the relief being claimed, and

(b) references to its accounting period were to its deemed accounting period under Part 2 of Schedule 18A to the Taxes Act 1988.

(3) Notice of consent of the surrendering company—

(a) is to be given to the officer of the Board under paragraph 70(3)(b) by the claimant company (and not by the surrendering company), and

(b) is to be given to the officer to whom the claimant company makes its company tax returns.

(4) If the surrendering company is not within the charge to income or corporation tax, the requirement under paragraph 71(1)(e) for notice of consent by the surrendering company to contain details of its tax district reference is not to apply.

(5) If notice of consent is withdrawn under paragraph 71, the notice of the withdrawal is to be given to the officer of the Board by the claimant company (and not by the surrendering company).

(6) If notice of consent is withdrawn under paragraph 75—

(a) the notice of withdrawal, and any copy of any new notice of consent, is to be sent to an officer of Revenue and Customs by the claimant company (and not by the surrendering company), and

(b) any notice containing directions by an officer of Revenue and Customs under sub-paragraph (4) of that paragraph is to be given to the claimant company (and not to the surrendering company).

(7) The remaining provisions of that paragraph, and the rest of this Part of this Schedule, are, accordingly, to be read with the appropriate modifications (so that, in particular, it is the claimant company (and not the surrendering company) which can bring an appeal under paragraph 75(7)).

(8) A notice under paragraph 27 (notice to produce documents etc for purposes of an enquiry) given to the claimant company may require the claimant company—

(a) to explain why the EEA amount meets the conditions mentioned in subsection (2)(a) to (d) of section 403F of the Taxes Act 1988 and is not prevented from being surrendered by section 403G of that Act, and

(b) to provide details of the recalculation required under Part 2 of Schedule 18A to that Act in relation to the EEA amount.

(9) Except where expressly indicated, requirements imposed under this paragraph are in addition to those imposed apart from this paragraph.

(10) In this paragraph “the EEA amount” has the same meaning as in Part 2 of Schedule 18A to the Taxes Act 1988.]