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Until 27 October 2021, a non-UK resident company that is resident or carrying on a trade in the European Economic Area (EEA) could surrender certain losses to a UK parent company or a UK resident 75% subsidiary of the UK parent company provided certain qualifying conditions are met¹. This legislation was introduced as a result of the ECJ decision in Marks and Spencer². It is, however, important to note that these provisions did not apply to consortia. Consortium claims could only be made between UK resident companies (or a non-UK resident company within the charge to corporation tax). Neither did these provisions apply to group claims for carried forward losses.

As announced in Autumn Budget 2021 and following the UK's exit from the EU, these rules were repealed for accounting periods beginning on or after 27 October 2021. Where a company's accounting period straddles this date, it is deemed to be two separate accounting periods for the purpose of applying the changes³.