Summer Budget 2015: Corporation tax – consortium relief and “link company”

A claim and surrender of group relief can currently be made between a company with a share in a consortium (a “member of the consortium”) and the consortium company (the “company owned by a consortium”).

Relief is extended to companies in the same group as a member of the consortium defined as a “link company” but only where the link company is located in the UK or, subject to meeting certain requirements, in the European Economic Area.

In a measure first announced in the Autumn Statement 2014, legislation will be introduced to remove the requirements relating to the location of the link company. This revision will have effect for consortium claims to group relief for accounting periods on or after 10 December 2014.

Removing the location condition from the legislation will make the operation of the relief simpler and therefore more attractive to those looking to invest by entering a consortium.