Part 5 Group relief

Chapter 2 Surrender of company's losses etc for an accounting period

Restrictions on losses and other amounts that may be surrendered

109 Restriction on losses etc surrenderable by dual resident
(1) This section applies if in the surrender period the surrendering company is UK resident and is also within a charge to non-UK tax under the law of a territory because—
(a) it derives its status as a company from that law,
(b) its place of management is in that territory, or
(c) it is for some other reason treated under that law as resident in that territory for the purposes of that tax.
(2) If condition A, B or C is met, the surrendering company may not surrender any losses or other amounts under this Chapter.
(3) Condition A is that the surrendering company is not a trading company throughout the surrender period.
(4) Condition B is that in the surrender period the surrendering company carries on a trade of such a description that the company's main function, or one of its main functions, consists of one or more of the following activities.
Activity 1
Acquiring and holding shares, securities or investments of any other kind (whether directly or indirectly).
Activity 2
Making, under loan relationships, payments in relation to which debits fall to be brought into account for the purposes of Part 5 of CTA 2009.
Activity 3
Making payments which are qualifying charitable donations.
Activity 4
Making payments similar to those within Activity 3 but which are deductible in calculating the profits of the surrendering company for corporation tax purposes.
Activity 5
Obtaining funds for the purposes of, or otherwise in connection with, any of Activities 1 to 4.
(5) Condition C is that in the surrender period the surrendering company carries on one or more of Activities 1 to 5—
(a) to an extent that does not appear to be justified by any trade which it carries on, or
(b) for a purpose that does not appear to be appropriate to any such trade.