Taxes Consolidation Act 1997 section 423

Company joining or leaving group or consortium

Section 423 governs the availability of group relief and consortium relief where companies join or leave a group or consortium during an accounting period.

• Group relief is only available for periods during which the surrendering and claimant companies are members of the same group or consortium throughout the entire accounting period in question.
• When two companies join or leave a group, a deemed accounting period ends and a new one begins at that point, unless an actual accounting period already ends then; losses and profits are apportioned on a time basis.
• Only the apportioned losses and profits relating to the period of common group membership can be surrendered or claimed; amounts arising outside that period are excluded.
• The same rules apply, with necessary modifications, where a company joins or ceases to fulfil the conditions for consortium relief, whether as a surrendering or claimant company.

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