Income and Corporation Taxes Act 1988

[F1 403 Losses etc. which may be surrendered by way of group relief. U.K.

(1) If in an accounting period (the “surrender period") the surrendering company has—

(a) trading losses, excess capital allowances or a non-trading deficit on its loan relationships, or

(b) charges on income, [F2 UK property business losses][F3 , management expenses or a non-trading loss on intangible fixed assets] available for group relief,

the amount may, subject to the provisions of this Chapter, be set off for the purposes of corporation tax against the total profits of the claimant company for its corresponding accounting period.

(2) Trading losses, excess capital allowances and a non-trading deficit on the company’s loan relationships are eligible for surrender as group relief even if the surrendering company has other profits of the surrender period against which they could be set.

Further provision about relief in respect of amounts eligible for surrender under this subsection is contained in sections 403ZA to 403ZC.

(3) Charges on income, [F4 UK property business losses], [F5 management expenses and a non-trading loss on intangible fixed assets] are available for surrender as group relief only to the extent that in aggregate they exceed the surrendering company’s gross profits for the surrender period.

Any excess surrendered shall be taken to consist first of charges on income, then [F4 UK property business losses][F6 , management expenses and finally a non-trading loss on intangible fixed assets].

Further provision about relief in respect of amounts available for surrender under this subsection is contained in section 403ZD.

(4) This section has effect subject to—

• section 404 (limitation of group relief in relation to certain dual resident companies), and

• sections 492(8) and 494A (oil extraction activities: availability of group relief against ring fence profits),[F7 and

• section 785ZA (restrictions on use of losses: leasing partnerships),][F8 and

• paragraph 38 of Schedule 10 to the Finance Act 2006 (sale etc of lessor companies etc: anti-avoidance)].]

Textual Amendments

F1 Ss. 403-403ZE substituted for s. 403 (with effect in accordance with s. 38(2)(3) of the amending Act) by Finance Act 1998 (c. 36), Sch. 5 para. 29 (with Sch. 5 para. 73)

F2 Words in s. 403(1)(b) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 118(2) (with Sch. 2 Pts. 1, 2)

F3 Words in s. 403(1)(b) substituted (24.7.2002) by Finance Act 2002 (c. 23), Sch. 30 para. 2(1)(a)

F4 Words in s. 403(3) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 118(3) (with Sch. 2 Pts. 1, 2)

F5 Words in s. 403(3) substituted (24.7.2002) by Finance Act 2002 (c. 23), Sch. 30 para. 2(1)(b)

F6 Words in s. 403(3) substituted (24.7.2002) by Finance Act 2002 (c. 23), Sch. 30 para. 2(1)(c)

F7 Words in s. 403(4) inserted (with effect in accordance with s. 83(4)-(6) of the amending Act) by Finance Act 2006 (c. 25), s. 83(1)

F8 Words in s. 403(4) inserted (with effect in accordance with Sch. 10 para. 2 of the amending Act) by Finance Act 2006 (c. 25), Sch. 10 para. 43(3)

Modifications etc. (not altering text)

C1 S. 403 applied by Finance Act 1996 (c. 8), Sch. 8 para 2(2) (as substituted (with effect in accordance with s. 38(2)(3) of the1998 amending Act) by Finance Act 1998 (c. 36), Sch 5 para. 64(3) (with Sch 5 para. 73))

C2 S. 403 modified (with effect in accordance with s. 38(2)(3) of the modifying Act) by Finance Act 1998 (c. 36), Sch. 5 paras. 75, 76

C3 S. 403 excluded (with effect in accordance with s. 579(1) of the affecting Act) by Capital Allowances Act 2001 (c. 2), ss. 260(7), 261 (with Sch. 3)

C4 S. 403 modified (5.10.2004) by Energy Act 2004 (c. 20), ss. 27(1)(b), 198(2); S.I. 2004/2575, art. 2(1), Sch. 1

C5 S. 403 restricted (with effect in accordance with Sch. 10 para. 2 of the affecting Act) by Finance Act 2006 (c. 25), Sch. 10 para. 38(5)