Group relief and capital gains groups

At least 75%. Group relief for losses needs one company to be a 75% subsidiary of the other, or both to be 75% subsidiaries of a third company, such as your holding company. The parent must own at least 75% of the ordinary share capital, directly or indirectly, and be entitled to at least 75% of the profits available for distribution and of the assets on a winding up. Ownership through a chain of companies is multiplied through, so 80% of 80% is only 64%.

Trading losses, excess capital allowances and non-trading deficits on loan relationships can be surrendered in full for the same period. UK property business losses, management expenses, non-trading losses on intangible fixed assets and qualifying charitable donations can be surrendered only to the extent they exceed the surrendering company's own profits. Capital losses can't be surrendered as group relief at all, although a separate election can move a gain or loss between capital gains group companies.

Not through group relief, but a section 171A election can achieve much the same result. Two companies in the same capital gains group can jointly elect to treat a gain or loss, or part of it, as accruing to the other company. So a gain on one company's sale of a property can be matched with capital losses sitting in another group company. The election must be made within two years after the end of the accounting period of the company in which the gain or loss arose.

Yes, for losses arising on or after 1 April 2017, through group relief for carried-forward losses. The surrendering company must consent, and the claimant normally has to use its own carried-forward losses first. Losses made before April 2017 can't be surrendered in this way. The general restriction on carried-forward losses also applies: above a deductions allowance of £5 million per group, only 50% of remaining profits can be covered by brought-forward losses.

Relief is limited to the overlapping period, when both companies were in the group. Profits and losses for each company's accounting period are apportioned by time to that overlap, and any relief already given for the same overlap is deducted. So a subsidiary acquired halfway through the claimant's year can usually surrender only the losses for the months after it joined, against the claimant's profits for the same months.

It can. Section 154 of the Corporation Tax Act 2010 treats two companies as not in the same group once arrangements are in place under which one of them could leave the group, or under which someone could take control of one but not the other. Arrangements don't have to be a signed or legally binding contract, so the point at which a sale counts as arranged needs care. From then on, losses may not be surrenderable between the company being sold and the rest of the group.

It's a principal company, usually the holding company, together with its 75% subsidiaries and their 75% subsidiaries, under section 170 of the Taxation of Chargeable Gains Act 1992. Every member must also be an effective 51% subsidiary of the principal company, entitled through the chain to more than half of its distributable profits and of its assets on a winding up. A company can be in only one capital gains group. Members can move assets between them without a corporation tax charge.

Yes, within a capital gains group. A transfer between group members is treated as made for a price that gives no gain and no loss, so the receiving company takes over the original cost and the gain is deferred until the asset leaves the group. SDLT is a separate tax with its own group relief, which also needs a 75% group and must be claimed on the SDLT return. Both reliefs can be lost if the receiving company leaves the group within a set period.

It's a catch-up charge on assets moved between group companies tax-free. If a company receives an asset from another group company under the no-gain, no-loss rule, and then leaves the group within six years while still owning it, it is treated as having sold and bought back the asset at its market value at the time it originally received it. The gain that was deferred on the intra-group transfer then becomes chargeable, which stops a company moving assets into a subsidiary just before selling it.

Not on assets moved between those two companies, provided they leave at the same time and are still grouped with each other. If a holding company sells a sub-group, and an asset passed between two companies within that sub-group, no degrouping charge arises because the asset stays within the companies that remain grouped together. Assets received from a company that stays behind are different: a degrouping charge can still arise on those, unless another exemption applies.

Where a subsidiary leaves because a group company sells its shares, the degrouping gain is added to the sale proceeds of those shares, so it falls on the seller and the substantial shareholding exemption can cover it. Where a subsidiary leaves another way, for example because it issues new shares to an outside investor that take the group below 75%, there's no share sale to attach the gain to. The charge then normally falls on the subsidiary itself, and SSE doesn't help.

There is a separate degrouping charge for intangible fixed assets, such as goodwill and intellectual property, under the corporate intangibles rules. Since Finance Act 2019, it doesn't apply where the company leaves the group on a sale of its shares that qualifies for the substantial shareholding exemption, unless there are arrangements for the shares to be sold on. That brought intangibles broadly into line with the capital gains rule, where the degrouping gain is added to the share sale proceeds.

SDLT group relief exempts a transfer of land or buildings between companies in a 75% group, where the parent has at least 75% of the shares, distributable profits and assets on a winding up, directly or indirectly. It isn't available where there are arrangements for the buyer to leave the group, for consideration to come from outside the group, or where tax avoidance is a main purpose. Relief must be claimed on an SDLT return, even though no tax is payable.

The relief is withdrawn if the company that received the property leaves the group within three years of the transfer, or later under arrangements made within those three years, while it still owns the property or a relevant interest in it. SDLT is then charged on the property's market value at the time of the original transfer, and the company must file a further return within 30 days. Some exits are excepted, such as the transferring company leaving through being wound up, but each case needs checking.

No. The substantial shareholding exemption only removes corporation tax on a gain from selling shares, including any capital gains degrouping charge added to the sale proceeds. SDLT clawback is a separate charge under the SDLT rules, falling on the company that received the property, and has no link to SSE. If a property company or trading subsidiary that received land under group relief is likely to be sold within three years, the SDLT cost should be part of the price negotiation.

Not if the group is small. A parent company subject to the small companies regime is exempt from preparing group accounts, though it can choose to. For financial years beginning on or after 6 April 2025, a group is small if it meets two of three tests: aggregate turnover of no more than £15 million net, an aggregate balance sheet of no more than £7.5 million net, and no more than 50 employees. Larger groups normally have to prepare group accounts.

The size thresholds went up for financial years beginning on or after 6 April 2025. A small group can now have aggregate turnover of up to £15 million and a balance sheet of up to £7.5 million (previously £10.2 million and £5.1 million), with no more than 50 employees, meeting two of the three. Medium group limits rose to £54 million turnover and £27 million balance sheet, with up to 250 employees. Some groups that previously prepared group accounts may no longer need to.

Often it helps. UK companies under common control can form a VAT group with one registration, and supplies between members, such as management charges or rent from a property subsidiary, are then ignored for VAT. The trade-off is that every member is jointly and severally liable for the whole group's VAT, which can undermine the ring-fencing of a risky new venture. Each company must be established or have a fixed establishment in the UK. Whether a VAT group suits your companies is worth a specific review alongside the corporation tax planning.

Yes. For rollover relief, the trades of all members of a capital gains group are treated as a single trade. So if one subsidiary sells qualifying business premises at a gain and another group company buys replacement premises for its trade within the time limits, the gain can be rolled over into the new asset. That gives the group flexibility to sell in one company and reinvest in another. Assets let outside the group and investment property generally don't qualify.

No. A capital gains group needs 75% ownership at each level, plus effective ownership of more than half of the profits and assets through the chain. A 60% subsidiary is outside the group, so assets moved to or from it are treated as sold at market value, and it can't receive or surrender group relief. It is still an associated company for corporation tax limits, and the holding company can still qualify for the substantial shareholding exemption if it sells its 60% stake.