Finance Act 1981

40 Group relief in case of consortium

(1) The Tax Acts shall have effect with the following amendments, being amendments making group relief available under section 258(2) of the Taxes Act where a member of a consortium is the surrendering company.

(2) For the said section 258(2) there shall be substituted—

“(2) Group relief shall also be available in accordance with the said provisions in the case of a surrendering company and a claimant company where either of them is a member of a consortium and the other is—

(a) a trading company which is owned by the consortium and which is not a 75 per cent, subsidiary of any company ; or

(b) a trading company—

(i) which is a 90 per cent, subsidiary of a holding company which is owned by the consortium ; and

(ii) which is not a 75 per cent subsidiary of a company other than the holding company ; or

(c) a holding company which is owned by the consortium and which is not a 75 per cent, subsidiary of any company:

Provided that a claim shall not be made by virtue of this subsection if the share in the consortium of the member in the relevant accounting period of the surrendering company (or, where that company is a trading company falling within paragraph (b) above, its holding company) is nil or if a profit on a sale of the share capital of the other company or its holding company which the member owns would be treated as a trading receipt of that member.”

(3) For section 259(8) of that Act there shall be substituted—

“(8) In applying any of the preceding subsections in the case of a claim made by virtue of section 258(2) above—

(a) where the claimant company is a member of a consortium only a fraction of the loss referred to in subsection (1) above, or of the excess referred to in subsection (2), (3) or (6) above, as the case may be, may be set off under the subsection in question ;

(b) where the surrendering company is a member of a consortium that loss or excess shall not be set off under the subsection in question against more than a fraction of the total profits of the claimant company;

and that fraction shall be equal to that member's share in the consortium in the accounting period referred to in section 258(2) above, subject to any further reduction under section 261(2) below.”

(4) In sections 263(5) and 264(2) of that Act for the words " by a company as a member of a consortium " there shall be substituted the words " by virtue of section 258(2) above ".

(5) In section 28(3)(a), (b) and (c) and (4) of the [1973 c. 51.] Finance Act 1973 for the words " the surrendering company" there shall be substituted the words " the surrendering or claimant company ".

(6) In section 29(2) of that Act—

(a) in paragraph (a) after the words " trading company " there shall be inserted the words " or a member of the consortium "; and

(b) in the words following paragraph (b) for the words " (as the surrendering company) fall within any of paragraphs (a) to (c) of subsection (2) of section 258 " there shall be substituted the words " (as the surrendering company or claimant company) fall within subsection (2) of section 258 ".

(7) This section has effect in relation to any accounting period of the surrendering company ending after 10th March 1981.