Our website uses cookies to enhance the visitor experience (what's a cookieCookies are small text files that are stored on your computer when you visit a website. They are mainly used as a way of improving the website functionalities or to provide more advanced statistical data.). Are you happy for us to use cookies during your visits?
Please note: continuing without making a choice equates to giving us your consent, which you can withdraw at any time via our cookies policy page.

Client Area Client Area

Magnify

Accounting, Taxation and Business Advisers

Call us today: 0118 405 6000 (Local Rate)

Request a Callback

Book a Free Consultation

Get a Fixed Quote

Find out how to Make more, Keep more and Work less

Want to pay less tax?

Newsletter Sign up

What size is your
business?

We know you love your business regardless of it's size, so let us offer you sound financial advice

  • Start-up
  • Small Business
  • Medium Business
  • Large Business

Losses in a Group of Companies

Newsletter issue - November 08.

Although single companies can normally only carry losses forward, where there are several companies in a group the losses made by one company can be set against profits made by other companies for the same year. Companies are regarded as a group when either 75% of the ordinary shares from one company are owned by the other company, or two or more companies are each owned at least 75% by a holding company.

Where a group exists all the trading losses, property losses, and excess charges (but not capital losses) arising in the loss-making company can be transferred to another company in the same group, to reduce the corporation tax that company pays for the same accounting period. You can opt to move as little or as much as the loss as you wish.

If you have more than one company it is therefore worth considering if they should be arranged in a group structure to take advantage of group loss relief.

Companies pay corporation tax at different rates according to the level of their taxable profits, so it makes sense to move the losses to the company that pays the highest marginal rate of corporation tax. The calculations can get quite complicated where there are a number of different types of income and various sizes of company in the same group, but we can help you reach the most tax efficient solution.

 

  • Share on Facebook
  • Share on LinkedIn
  • Share on Twitter
  • Email this page to a friend