Consortium relief lets losses move between a company owned jointly by several corporate shareholders and those shareholders, even though none of them controls it. Each member can only take its ownership proportion of the jointly owned company’s loss, measured as the lowest of its share capital, profit, asset and voting entitlements, and every claim needs the written consent of all the consortium members.

What is a consortium for corporation tax?

Consortium relief is not a separate relief in law. It is group relief claimed through a consortium relationship rather than a group relationship, under Part 5 of the Corporation Tax Act 2010 (CTA 2010). HMRC uses the phrase “consortium relief” in its Company Taxation Manual (CTM80502) to distinguish it from ordinary group relief.

Under section 153 CTA 2010, a company is owned by a consortium if:

  • it is not a 75% subsidiary of any company; and
  • at least 75% of its ordinary share capital is beneficially owned by other companies, each of which beneficially owns at least 5% of that capital.

The companies holding at least 5% are the members of the consortium. A trading company that is a 90% subsidiary of a consortium owned holding company is also treated as owned by the consortium (section 153(3)). If one shareholder holds 75% or more, the companies form a group instead and relief can only pass under the group rules (CTM80530).

The typical case is a joint venture company set up by two or three corporate partners, none of which has control.

Which way can losses flow?

Section 130 sets out three consortium conditions (CTM80502):

  • Condition 1 covers claims between a member of the consortium and the company owned by the consortium. Relief can go up from the jointly owned company to a member, or down from a member to the jointly owned company (sections 132, 143 and 144).
  • Condition 2 lets the company owned by the consortium surrender to a company in the same group as a member. That member is called the link company (section 133(1)).
  • Condition 3 lets the company owned by the consortium claim relief from a company in the link company’s group (section 133(2)).

For accounting periods beginning on or after 10 December 2014, there is no requirement for the link company to be UK related or established in the European Economic Area (CTM80555).

How much loss can each member claim?

The key restriction is the ownership proportion. Where a member claims from the company owned by the consortium, section 143 limits the claim to the ownership proportion of the surrendering company’s loss for the overlapping period. HMRC (CTM80540) explains that the proportion is the lowest of:

  1. the proportion of ordinary share capital the member beneficially owns;
  2. the proportion of profits available for distribution to equity holders to which it is beneficially entitled;
  3. the proportion of assets available to equity holders on a notional winding up to which it would be entitled; and
  4. the proportion of voting rights it directly possesses, for claims for accounting periods beginning on or after 12 July 2010.

If any proportion changes during the period, a time weighted average is used. Because the lowest figure is taken for each member, the members’ proportions may add up to less than 100%, and the unclaimed balance is simply lost for consortium purposes. The proportions are measured against all equity holders, including individual shareholders who cannot claim themselves.

Where relief flows down, section 144 limits the claim to the member’s ownership proportion of the claimant company’s total profits (CTM80545).

What other limits apply?

The jointly owned company must use its own losses first

Under section 147, a company owned by a consortium can only surrender a trading loss to the extent it could not have been set against its own total profits of the same period under section 37, whether or not it actually makes that claim (CTM80570). Profits in the joint venture from other sources therefore reduce what the members can take.

Group relief takes priority

If the company owned by the consortium is also the parent of its own group, section 148 limits consortium surrenders to the amount exceeding the group’s potential relief, meaning what could be surrendered within its own group. No group claim needs to be made for this to apply (CTM80580).

Other restrictions

  • No consortium claim is possible if a profit on selling the member’s shares would be a trading receipt, for example where a bank holds the shares on trading account (CTM80530).
  • Sections 146A and 146B halve the relief where arrangements prevent a member from controlling the company and a main purpose is to obtain a tax advantage (CTM80525).
  • Claims by companies in the link company’s group are measured using the link company’s ownership proportion, and in total cannot exceed what the link company itself could have claimed (sections 145 and 146, CTM80555).

Can carried forward losses be surrendered?

Losses carried forward from 1 April 2017 onwards can be relieved under the rules for group relief for carried forward losses in Part 5A CTA 2010. CTM82520 explains that where the company owned by the consortium is the claimant, its claim from a member is limited to that member’s ownership proportion of the claimant’s relevant maximum, using the same four tests, and that group relief takes precedence where the claimant is also in a group. Claims from companies in a link company’s group are limited in the same way by reference to the link company. The relevant maximum ties into the corporate loss restriction, so large carried forward claims need both sets of rules applied.

How is a claim made and who must agree?

Paragraph 70 of Schedule 18 to the Finance Act 1998 requires a consortium claim to have the consent of the surrendering company and of each member of the consortium. Consents must be given in writing to the officer dealing with the surrendering company’s returns at or before the time of the claim, and copies must accompany the claim, otherwise it is ineffective. HMRC’s example at CTM80520 shows that only members holding at least 5% need to consent; a corporate shareholder with 4% does not.

Under paragraph 74, a claim can be made or withdrawn up to the latest of the first anniversary of the claimant’s filing date, 30 days after an enquiry into that return is completed, 30 days after an HMRC amendment following the enquiry, or 30 days after any appeal is finally determined. HMRC can allow a later claim. Where accounting periods do not coincide, profits and losses are apportioned to the overlapping period.

What does a claim look like in practice?

Illustration only. JV Ltd is owned by three companies: A Ltd holds 40%, B Ltd 35% and C Ltd 25%. Votes, dividends and winding up rights follow the shareholdings. All have the same accounting period. JV Ltd makes a trading loss of £200,000 and has £50,000 of interest income.

Step Amount
Trading loss £200,000
Less amount JV Ltd could set against its own £50,000 of profits (section 147) (£50,000)
Loss available for consortium relief £150,000
A Ltd maximum claim (40%) £60,000
B Ltd maximum claim (35%) £52,500
C Ltd maximum claim (25%) £37,500

Each claim needs the consent of JV Ltd and all three members. If C Ltd’s shares carried only 10% of the votes, its proportion would drop to 10% and the remaining 15% of the loss could not be claimed by anyone. Any loss left unclaimed stays with JV Ltd under the normal company trading loss rules.

What mistakes do companies make with consortium claims?

  • Checking only shareholdings and ignoring votes or profit entitlements set out in the articles or shareholder agreement.
  • Forgetting that a member with 75% or more turns the structure into a group.
  • Claiming the gross trading loss without first deducting what the joint venture could relieve against its own profits.
  • Filing a claim without written consents from every member, which makes it ineffective.
  • Missing the claim deadline because the joint venture’s accounts were finalised late.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.