Priority between loss reliefs in loss making companies

Why does it matter?

A company that is a member of a group and has incurred any of the types of losses available for surrender by way of Group relief may, without any further Rules, have more than one way in which to use the loss. There are a number of rules that restrict the company's choice by, for instance, prescribing which types of loss relief must be used first and against which types of Profits those losses can be set.

The most important rule is that it is not possible to obtain relief for any loss more than once—whether in the same company or as group relief.

The rules applicable to each of the types of loss available for surrender as group relief are explained in this Practice Note.

This Practice Note does not cover the rules applicable to losses incurred by (i) companies not resident in the UK, (ii) UK resident companies operating in other territories, (iii) insurance companies or (iii) by companies with oil and gas activities.

Trading losses

A company

Jurisdiction(s):

United Kingdom

Key definition:

Priority definition

What does Priority mean?

The ranking of security interests ie the order in which each of the secured creditors can claim on the secured property in an enforcement or insolvency scenario. A deed of priority or intercreditor deed can vary the priority a security interest enjoys by virtue of general law.

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