What is a Consortium?
A CONSORTIUM exists where 2 or more companies (UK or overseas) between them own at least 75% of another company AND each company’s holding is AT LEAST 5%.
The investing company is known as a CONSORTIUM MEMBER.
The target company is known as a CONSORTIUM COMPANY.
The CONSORTIUM COMPANY CANNOT be a member of a 75% LOSS GROUP.
Note: If the minority shareholding is an INDIVIDUAL NOT A COMPANY then it is NOT a consortium company.
How Does Consortium Relief Work?
A form of LOSS RELIEF, known as CONSORTIUM RELIEF is available between a UK CONSORTIUM COMPANY and its UK MEMBERS, for CURRENT PERIOD and BROUGHT FORWARD LOSSES.
CORRESPONDING ACCOUNTING PERIOD rules apply as they do for GROUP RELIEF.
LOSSES can be SURRENDERED UPWARDS from the CONSORTIUM COMPANY to CONSORTIUM MEMBERS. But ONLY up to the PERCENTAGE INTEREST that the CONSORTIUM MEMBER has in the CONSORTIUM COMPANY. The loss must first be relieved against CURRENT PERIOD TOTAL PROFITS before QCDs in the CONSORTIUM COMPANY.
LOSSES can also be SURRENDERED DOWNWARDS from the CONSORTIUM MEMBER to the CONSORTIUM COMPANY. But only up to the PERCENTAGE of the CONSORTIUM COMPANY’s TTP. The loss does NOT have to be relieved in the CONSORTIUM MEMBERS’ computation first.
CONSORTIUM MEMBERS can be RESIDENT anywhere in the world but ONLY UK RESIDENT CONSORTIUM MEMBERS can claim or surrender LOSSES.