Group relief calculator, 2026/27

How this is calculated

Group relief allows a company with a trading loss, or certain other losses, to surrender some or all of it to another company in the same 75% group, which then deducts it from its own taxable profit for the corresponding period, rather than the loss-making company having to carry it forward against its own future profits.

The amount surrendered cannot exceed the lower of the available loss and the claimant company's taxable profit, since group relief cannot create a repayment or reduce profit below nil. The saving is the corporation tax the claimant company would otherwise have paid on the surrendered amount, calculated at its own marginal rate including any marginal relief.

Because two or more companies under common control share the £50,000 and £250,000 corporation tax thresholds between them, both companies' thresholds are divided by the number of associated companies, which the calculator reflects by assuming two associated companies.

When it makes sense

Group relief is most useful where a group has one established, profitable trading company and a newer or seasonal company running at a loss, such as a development company still incurring pre-revenue costs. Instead of the loss sitting unused for years, it reduces the group's overall tax bill in the year it arises.

It requires the companies to be genuinely part of a group for tax purposes, generally 75% or more common ownership, and both companies need overlapping accounting periods; if periods do not match exactly, the surrender is apportioned on a time basis.

Practical steps

Group relief claims are made and consented to on each company's own corporation tax return, and both companies need to agree the amount surrendered in writing. There is no cash payment required by law, though groups commonly agree a payment for the loss up to the tax saved, which itself is tax neutral if it does not exceed that saving.

Keep clear group structure evidence (shareholdings, common control) on file, since HMRC can and does check group relief claims where ownership is not straightforward.

What ownership level is needed for group relief?

Broadly the surrendering and claimant companies need to be at least 75% commonly owned, either one owning the other or both being subsidiaries of the same parent, for the whole or relevant part of the accounting periods concerned.

Can I surrender more loss than the claimant company's profit?

No. The amount surrendered is capped at the claimant company's taxable profit for the corresponding period, so any loss above that figure stays with the surrendering company to carry forward.

Do the companies need to pay each other for group relief?

No payment is legally required, but it is common practice for the claimant to pay the surrendering company an amount up to the tax saved, and such payments are not taxable or deductible if kept within that limit.

What if the two companies have different year ends?

The loss and profit are matched on a time-apportioned basis for the overlapping period only, so mismatched accounting periods reduce the amount of loss that can effectively be surrendered.