Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she plans to take steps to stop joint ventures using corporation tax reliefs through the purchase or transfer of trading losses.

Group relief allows the transfer of allowable losses from one company to another in the same group. Consortium relief is a type of group relief which allows companies that jointly own another company (a consortium company) to obtain relief for their share of that company’s tax losses, so that they are taxed on a measure of profits that reflects losses they may make from their participation in a joint venture.

For these reliefs to apply, groups and consortia must meet certain eligibility criteria. For example, both types of relief are available to companies that have specific shareholding ownership relationships and are subject to UK Corporation tax. Joint ventures must meet the eligibility criteria to claim relief which is limited by reference to the proportion of member’s economic interest in the consortium company.

Existing legislation already contains targeted anti‑avoidance provisions designed to prevent the exploitation of losses, and the Government keeps these rules under review.