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CTA10/S188DC

The unused parts of the surrenderable amounts must not include losses that have previously been surrendered for the overlapping period.

To identify amounts surrendered on prior claims for the overlapping period, identify any claims to group relief for carried-forward losses under

CTA10/S188CB and CTA10/S188CC by any company which relate to the same surrenderable amounts as the current claim.

If the prior claims have been withdrawn, you do not need to remove any amount from the surrenderable amounts of the surrendering company. If not, then take the following steps:

Step 1

Identify the overlapping period for the prior claim.

Step 2

Identify any period that is common to the overlapping period of the prior claim and the overlapping period of the current claim. If there is no common period, there is no previously used amount in relation to the prior claim and you do not need to remove any amount from the surrenderable amounts.

Step 3

If there is a common period, you must remove from the surrenderable amounts the amount used in the prior claim that relates to that common period. To determine this amount, take the proportion of the overlapping period for the prior claim that is included in the common period, and apply that proportion to the amount of group relief for carried-forward losses given on the prior claim. Follow this process for every prior claim that relates to the surrenderable amounts.

Example

In this example, losses have been time apportioned on a monthly basis for simplicity. Normally, time apportionment should be made by reference to days.

Companies A, B, C and S are all members of the same group for group relief purposes for the relevant periods. None of the conditions that would make group relief for carried-forward losses unavailable apply.

Company S made 拢250,000 trading losses in its accounting period 1 January 2019 to 31 December 2019, which it carries forward to its accounting period 1 January 2020 to 31 December 2020. Company C wishes to make a claim for group relief for carried-forward losses from Company S in its accounting period 1 July 2020 to 30 Jun 2021.

Company A also previously made a claim of 拢50,000 for group relief for carried-forward losses from Company S in its accounting period 1 April 2019 to 31 March 2020.

In addition, Company B previously made a claim of 拢100,000 for group relief for carried-forward losses from Company S. The accounting period for Company B is 1 May 2020 to 30 April 2021.

To determine the amount of Company S鈥檚 losses that may be surrendered to Company C, first determine the surrenderable amounts for the overlapping period for the current claim. The overlapping period for Company C鈥檚 claim is 1 July 2020 to 31 December 2020.

Company S	Company C
S鈥檚 AP 1 Jan 2020 - 31 Dec 2020	-
-	C鈥檚 AP 1 Jul 2020 - 30 Jun 2021

The proportion of Company S鈥檚 surrender period included in the overlapping period is 6/12. Applying this to the surrenderable amounts of 拢250,000, this means that 拢125,000 of Company S鈥檚 trading losses relate to the overlapping period.

Next, take the following steps to determine the amount of any of the surrenderable amounts for the overlapping period that have been used on prior claims made by Company A and Company B:

Company A鈥檚 prior claim

Step 1

Identify the overlapping period of Company A鈥檚 prior claim. The overlapping period for Company A鈥檚 claim is 1 January 2020 to 31 March 2020.

Company A	Company S
-	S鈥檚 AP 1 Jan 2020 - 31 Dec 2020
A鈥檚 AP 1 Apr 2019 - 31 Mar 2020	-

Step 2

Identify the period that is common to Company A鈥檚 and Company C鈥檚 claims.

Here, there is no period that is common to the overlapping periods for Company A鈥檚 and Company C鈥檚 claims. No amount therefore needs to be removed from the surrenderable amounts of the overlapping period for Company C鈥檚 claim in respect of Company A鈥檚 prior claim so Step 3 is not carried out.

Company B鈥檚 prior claim

Step 1

Identify the overlapping period of Company B鈥檚 prior claim. The overlapping period for Company B鈥檚 claim is 1 May 2020 to 31 December 2020.

Company S	Company B
S鈥檚 AP 1 Jan 2020 - 31 Dec 2020	-
-	B鈥檚 AP 1 May 2020 - 30 Apr 2021

Step 2

Identify the period that is common to Company B鈥檚 and Company C鈥檚 claims. The overlapping period for Company C鈥檚 claim is 1 July 2020 to 31 December 2020. The overlapping period for Company B鈥檚 claim is 1 May 2020 to 31 December 2020. The common period is 1 July 2020 to 31 December 2020.

B鈥檚 claim overlapping period	C鈥檚 claim overlapping period
1 May 2020 - 31 Dec 2020	-
-	1 Jul 2020 - 31 Dec 2020

Step 3

Determine the surrenderable amounts used for Company B鈥檚 prior claim for the common period. Take the proportion of the overlapping period of Company B鈥檚 claim that is included in the common period, and apply that to the group relief allowed to Company B. This is 拢100,000 x 6/8 = 拢75,000. 拢75,000 of the surrenderable amounts for the overlapping period for Company C鈥檚 claim has been used in Company B鈥檚 prior claim.

The amount of group relief for Company S鈥檚 carried-forward losses that may be surrendered to Company C is:

• The surrenderable amount for the overlapping period of Company C鈥檚 claim: 拢125,000,

Less

• The amount used in Company B鈥檚 prior claim: 拢75,000.

The maximum group relief for carried-forward losses that can be claimed by Company C from Company S is therefore 拢125,000 - 拢75,000 = 拢50,000.

Where time apportionment does not produce a just and reasonable result, another method is to be used that gives a result that is just and reasonable.