Consortium relief is a UK corporation tax mechanism that lets a company jointly owned by several corporate shareholders share its tax losses with those owners, or receive their losses, even though no single shareholder holds the 75% stake that standard group relief requires. It is governed by Part 5 of the Corporation Tax Act 2010 (with carried-forward losses now covered by Part 5A), and each owner’s share of relief is capped by their proportion of ownership in the jointly held company.
The relief exists because joint ventures and co-invested trading companies would otherwise fall between two stools: no shareholder owns enough for group relief, but the losses are commercially shared. Getting it right turns on three things: whether the structure qualifies, how much each member can actually claim, and whether the paperwork lands within the time limit.
When a Company Is Owned by a Consortium
A company is “owned by a consortium” when at least 75% of its ordinary share capital is beneficially owned by other companies and each of those owning companies holds at least 5%. The company must not be a 75% subsidiary of any single owner; if it were, standard group relief would apply and consortium relief would be unavailable.1HM Revenue & Customs. CTM80530 – Consortia: Group Relief: Meaning of Members of the Consortium and Company Owned by a Consortium
The consortium company itself has to be a trading company or the holding company of a trading company. Where it is a holding company, it must directly and beneficially own at least 90% of the trading subsidiary’s ordinary share capital, and that subsidiary must not be a 75% subsidiary of anyone other than the holding company.2HM Revenue & Customs. CTM80535 – Consortia: Group Relief: 90% Subsidiary
Who Can Surrender and Who Can Claim
Both the surrendering company and the claimant must be within the charge to UK corporation tax. In practice that means UK tax residence, though a non-resident company can take part if it trades in the UK through a permanent establishment and the losses relate to that establishment’s activities.
The qualifying consortium relationship has to exist throughout the “overlapping period”: the window during which both companies’ accounting periods run concurrently and the consortium structure is in place. If the relationship begins or ends mid-period, profits and losses are time-apportioned to cover only the qualifying window.
Losses That Can Be Surrendered
The categories available under consortium relief are the same as those for standard group relief, listed in section 99 of the Corporation Tax Act 2010:3Legislation.gov.uk. Corporation Tax Act 2010 Part 5
- Trading losses for the accounting period.
- Capital allowances where they exceed taxable trading income.
- Non-trading loan relationship deficits.
- Qualifying charitable donations that exceed the surrendering company’s profits.
- UK property business losses.
- Management expenses of an investment business that exceed income.
- Non-trading losses on intangible fixed assets.
Only current-period amounts can be surrendered under Part 5. A company with a £200,000 trading loss and £50,000 of non-trading deficits could put up to £250,000 on the table, but the ownership proportion cap almost always reduces what any single member actually gets.
How Much Each Member Can Claim
The relief available to a consortium member depends on its “ownership proportion,” and that proportion is not simply the percentage of shares it holds. It is the lowest of four separate measures:4Legislation.gov.uk. Corporation Tax Act 2010 Section 143
- The proportion of ordinary share capital beneficially owned by the member.
- The proportion of distributable profits to which the member is entitled.
- The proportion of assets the member would receive on a winding up.
- The proportion of votes the member directly holds at a general meeting.
If a member holds 30% of the share capital but is entitled to only 20% of distributable profits, the ownership proportion is 20%. In straightforward joint ventures the four figures align; complex share structures with multiple classes of equity can produce different numbers for each test. If any of the proportions changes during the overlapping period, the average proportion for the period is used.5HM Revenue & Customs. CTM80545 – Amount of Relief: Claimant Is Company Owned by a Consortium
The maximum relief is then the lower of two amounts:
- The ownership proportion multiplied by the surrendering company’s available loss for the overlapping period.
- The claimant company’s total taxable profits for the same period.
A claim cannot create or increase a loss in the claimant’s hands. If the consortium company has a £400,000 trading loss and a member’s ownership proportion is 30%, the ceiling is £120,000. A member with £80,000 of taxable profits can only claim £80,000. A member with £200,000 of profits is still capped at £120,000.
The calculation runs the same way in reverse. When a consortium member surrenders its own losses to the consortium company, the relief is limited to the member’s ownership proportion of the consortium company’s profits.
Mismatched Accounting Periods
Consortium companies and their members rarely share accounting dates. Where they differ, the legislation identifies the overlapping period and apportions profits and losses to that window on a time basis.6HM Revenue & Customs. CTM80210 – Group Relief: Non-Coinciding Accounting Periods or Group Relationships
If the consortium company’s accounting period runs January to December and a member’s runs April to March, the overlap is April to December: nine months. A full-year loss of £600,000 becomes £450,000 for the overlap, and the member’s ownership proportion applies to that figure.
Time apportionment also handles mid-period changes in ownership. If a member held 40% for the first six months and 25% for the last six months of a 12-month period producing a £400,000 loss, the calculation is (£200,000 × 40%) + (£200,000 × 25%) = £130,000.
Group Relief Takes Priority
Where a surrendering company also sits in a corporate group, standard group relief has first claim on its losses. Before consortium relief is calculated, the surrendering company’s available losses are reduced by the maximum group relief that could theoretically be claimed by its fellow group members, even if no group relief claim is actually made.7Legislation.gov.uk. Corporation Tax Act 2010 Part 5 – Section 148
The same rule works on the claimant side: a claimant’s available profits are reduced by the group relief its group members could potentially claim against it. Consortium relief only picks up what group relief cannot. Claims frequently go wrong at this step because companies overstate the losses available for consortium surrender without stripping out the theoretical group relief first.
Carried-Forward Losses
Since April 2017, Part 5A of the Corporation Tax Act 2010 has extended consortium relief to carried-forward losses, letting members claim relief against profits using the consortium company’s losses from earlier years, or vice versa. The qualifying conditions mirror those under Part 5.8Legislation.gov.uk. Corporation Tax Act 2010 Part 5A
Carried-forward loss relief sits inside the wider corporate loss restriction. A company can use carried-forward losses to offset up to £5 million of profits without restriction (the deductions allowance). Above that threshold, only 50% of the remaining profits can be sheltered by carried-forward losses.9GOV.UK. Work Out and Claim Relief From Corporation Tax Trading Losses The £5 million allowance is shared across the group or consortium, so individual allowances in larger structures can be much smaller.
Part 5A also carries an extra 50% reduction where arrangements prevent the claimant (alone or with other members) from controlling the surrendering company. This anti-avoidance provision bites specifically on structures that dilute the members’ collective control.
Link Companies
Relief does not have to flow directly between a consortium member and the consortium company. Where a member is itself part of a corporate group, its fellow group companies can access consortium relief through a “link company” arrangement: the member that owns shares in the consortium company acts as the link, and other group companies claim or surrender through it.10HM Revenue & Customs. CTM80555 – Consortia: Group Relief: Claim by Company in Same Group as Consortium Member
The combined claims by the link company and its group members cannot exceed what the link company alone could have claimed. The ceiling is the member’s actual ownership proportion; the link mechanism just lets a profitable subsidiary use the relief when the member itself has no profits to shelter.
Arrangements That Disqualify Relief
Section 155 of the Corporation Tax Act 2010 bars consortium relief where arrangements exist that would let any person (other than the holding company of a 90% subsidiary) control 75% or more of the votes at a general meeting of the consortium company.11HM Revenue & Customs. CTM80605 – Consortia: Group Relief: Arrangements: Disqualifying Relief It catches arrangements that could produce that level of control even if no one currently exercises it.
Section 146A separately reduces the relief where arrangements enable any person to prevent the consortium members from collectively controlling the surrendering company during any part of the overlapping period.12Legislation.gov.uk. Corporation Tax Act 2010 Part 5 – Section 146A
Shareholders’ agreements, option arrangements, and side deals all need checking against these provisions. Companies sometimes find at claim stage that a commercial arrangement they treated as routine actually disqualifies the relief, by which point the accounting period may be closed.
Making the Claim
The claimant submits the claim as part of its Company Tax Return (CT600), using the supplementary CT600C pages for group and consortium relief.13GOV.UK. Supplementary Pages CT600C – Group and Consortium Relief The form asks for the surrendering company’s name and tax reference, its accounting period, and the amount being claimed.
Before or at the time of the claim, the surrendering company must provide written consent specifying the amount being surrendered and the accounting period it relates to. A copy of the consent notice goes to the HMRC office dealing with the claimant’s return.14GOV.UK. Corporation Tax – Group and Consortium Relief Keep the ownership proportion calculation (with evidence for all four measures), proof that the consortium structure was in place throughout the overlapping period, and the formal consent letter. HMRC can request any of this during an enquiry.
The Deadline
You can make, amend, or withdraw a consortium relief claim up to one year after the filing date for the claimant’s tax return. Because the filing date is 12 months after the end of the accounting period, this works out to no earlier than two years after the period ends.15HM Revenue & Customs. COTAX Manual COM53110 – Claims and Reliefs: Other Reliefs: Group and Consortium Relief, Time Limit for Claims A claim for an accounting period ending 31 December 2025 must therefore be filed by 31 December 2027 at the latest.
If HMRC opens an enquiry into the claimant’s return, the deadline extends to the later of the standard time limit or 30 days after the enquiry closes. More precisely, the claim can be made or amended up to 30 days after HMRC issues a closure notice, a notice of amendment following the enquiry, or the determination of any appeal against such an amendment, whichever comes last. HMRC has discretion to extend the deadline in other circumstances, but it is granted sparingly.