Relief on Losses

Dawny Registered Posts: 62 Regular contributor ⭐
Company A (husband and wife with a 50% each share split) invested money into a new company, B (4 shareholders including husband and wife, 25% each) by way of a loan.

Company B has always made a loss and is now being closed.

Company A want some relief on their Corporation Tax bill for the losses in Company B and the investment they made.

Because of the share split I don't think they are entitled to group relief, is this correct? Company B has never made a profit so losses can't be carried back.

As this is a loan, any payments that went to Company B are not allowable in the tax calculation for Company A, is this correct?

Does anyone have any ideas?

Thank you!


  • reader
    reader Registered Posts: 1,037 Beyond epic contributor 🧙‍♂️
    Re: group relief, I'm not quite sure, are you saying a 50% shareholding is not enough, i.e. company A should own 51% for group relief to apply?

    Re: loan, I think you are right, i.e. the loan was for investment rather than trading purposes, therefore the write off of the inter-company loan would have to be added back on the tax comp.

    I hope there is some tax rule that will allow the husband-wife team to get some sort of break
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