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D2.260 Group relief—overseas companies with surrenderable losses

Where a non-resident company is within the scope of UK tax (for example, it has a UK permanent establishment which is loss making), the amount that it can surrender as group relief can be restricted. Prior to changes announced in Autumn Budget 2021, the operation of the rules depended on whether the company was resident in an EEA territory or not.

However, for accounting periods beginning on or after 27 October 2021, the distinction between EEA and non-EEA companies is removed. Where a company's accounting period straddles this date, it will be deemed as separate accounting periods for the purpose of applying these changes¹.

It should be noted that these rules only impact where the non-resident company is the surrendering company. Where the non-resident company with the UK permanent establishment is the claimant company, then it may claim group relief against its UK chargeable profits in accordance with the usual group relief rules.

If tax relief is restricted, there can be no surrender, as group relief, or