Consortium relief
The measure
This is a proposal to amend the rules relating to the surrender of losses where
there is a UK consortium involved.
The first area of proposed changes would allow companies resident in the
European Economic Area which are members in UK consortia to pass relief for
losses of the UK consortia to their UK subsidiaries.
The second area of proposed changes is a tightening of the rules to limit the
amount of relief available based on the consortium member's level of effective
control/active involvement in the consortium company.
Who will be affected?
Companies within the UK and the European Economic Area which are involved in UK consortia.
When?
The Government intends to introduce legislation as soon as possible in the next Parliament. No comment has been provided on when the provisions would become effective.
The first area of the proposed changes seeks to address the widely recognised
issue of the compliance of the UK 'link company' consortium relief rules with
European law. This is a welcome proposal which we hope will be carried through
in the next Parliament, although the timing of the change is not clear.
The second area of proposed changes is intended to limit relief where there are
'artificial arrangements' to enable what HMRC would regard as excessive access
to relief. We will be interested to see a further explanation of the terms
currently being used and to understand how this will apply in practice.
