Corporation Tax Group Relief for Property Companies: Surrendering Losses Across SPVs

Many UK landlords end up with more than one limited company. The standard reasons are mortgage-driven (lenders prefer a clean single-asset SPV per property), liability-driven (segregating risk between properties), or tax-driven (different investor groups owning different shares of different properties). Whatever the route in, once a landlord has three, four or five property companies, the question of whether losses in one can be used to shelter profits in another moves from academic to material. Corporation tax group relief is the answer in most cases, and the regime is more accessible than landlords typically assume.

This page works through the mechanics for a typical property group: the 75% direct-or-indirect ownership test, what can and cannot be surrendered, the corresponding accounting period rule, the CT600 mechanics for making the claim, the parallel mechanism for capital losses under section 171A TCGA 1992, and the failure modes we see most often. For the underlying corporation tax rates and bands, see our corporation tax rates for property companies 2026/27 guide. For the wider structural choice of how to run a property portfolio through companies in the first place, see our 2026 property company structure guide.

Why portfolio landlords end up with multiple companies

The single-SPV-per-property model has become the default for portfolio buy-to-let lending. Specialist BTL lenders price more aggressively when each property sits in its own ring-fenced company because the security is cleaner and a default on one mortgage does not put the rest of the portfolio at risk. A landlord with six properties typically ends up with six SPVs, one HoldCo above them, and a fairly standard set of inter-company balances.

The same structure creates a tax mismatch the landlord did not necessarily plan for. In any given year, one SPV may be loss-making (refurbishment year, void period after a tenant leaves, large repair bill, interest-cost spike) while three are comfortably profitable. Without group relief, the loss sits trapped in the loss-making SPV, only available for carry-forward against that company's own future property profits. With group relief, the loss can move sideways inside the group and extinguish current-period tax in the profitable SPVs.

The annual saving is rarely transformational on its own, but compounds across a five-to-ten-year holding period. A loss of £30,000 that would otherwise be carried forward for two or three years before relief crystallises is worth £7,500 of tax saved today (at the 25% rate that almost all property SPVs pay) instead of £7,500 saved a few years later. The time value alone is meaningful.

The 75% ownership test in plain English

The eligibility test for group relief is in section 151 of the Corporation Tax Act 2010. Two companies are in a "group relief group" where one is a 75% subsidiary of the other, or both are 75% subsidiaries of a third company. The test has three limbs that all need to be satisfied at the same time:

• 75% of the ordinary share capital of the subsidiary is owned directly or indirectly by the parent.
• 75% of the rights to profits available for distribution sit with the parent.
• 75% of the rights to assets on a winding-up sit with the parent.

The first limb catches direct shareholdings. The second and third limbs are the anti-avoidance grit that stops structures with non-voting shares, preference dividends, or unusual liquidation preferences from getting around the rule. For most landlord groups (one HoldCo owning 100% of each SPV through ordinary shares with standard articles), all three limbs are met automatically.

Indirect ownership works by multiplication through the chain. If HoldCo owns 80% of MidCo and MidCo owns 90% of OpCo, HoldCo indirectly owns 72% of OpCo (80% × 90%) and the group relief test fails between HoldCo and OpCo. Property landlord groups rarely have multi-tier chains, but where they do (a family investment company at the top, a HoldCo in the middle, SPVs at the bottom), the chain arithmetic matters.

What can be surrendered

Section 99 of the Corporation Tax Act 2010 lists the surrenderable amounts. The full list:

• Trading losses for the period (section 37 losses).
• Capital allowances available as a deduction from total profits (rare for a property SPV).
• Non-trading loan relationship deficits.
• UK property business losses for the period (the most relevant for property SPVs).
• Excess management expenses (for investment companies).
• Excess qualifying charitable donations.
• Non-trading losses on intangible fixed assets.

For a typical property SPV, the surrenderable amount is the current-period UK property business loss, calculated in the same way as for the SPV's own carry-forward purposes. Allowable expenses are deducted from rental income; if the result is a loss, that loss is the surrenderable amount, before being apportioned to corresponding accounting periods where year-ends differ.

Capital losses are the most important thing that cannot be surrendered. A property SPV that sells a property at a loss has a chargeable capital loss, not a UK property business loss. The capital loss is pooled within the selling SPV and, absent a section 171A election, sits there indefinitely waiting for a future gain in that company. The CGT side of the equation has its own group regime and is covered separately below.

Corresponding accounting periods

Group relief is only available for the portion of a surrendering company's loss that falls in an accounting period overlapping with the claimant company's accounting period. The phrase HMRC uses is "corresponding accounting periods" and the rule sits in sections 137 to 141 CTA 2010.

Worked illustration. SurrenderCo has a year-end of 31 December 2026 and an annual loss of £24,000 evenly accrued through the year (£2,000 per month). ClaimCo has a year-end of 31 March 2027. The overlap between SurrenderCo's December year and ClaimCo's March year is the three months from 1 January to 31 March 2027. Apportioned evenly, £6,000 of SurrenderCo's loss arises in that overlap and is surrenderable to ClaimCo. The remaining £18,000 of the loss is either surrenderable to a different group company with a year-end that overlaps the other months, or carried forward in SurrenderCo against its own future property profits.

The mechanical fix to this complication is year-end alignment. Once every company in the group has the same year-end (almost always 31 March, to align with the tax year on the personal side too), corresponding accounting periods are coterminous, the apportionment question disappears, and the full loss for the period is surrenderable to any sister company. Changing a UK company's accounting reference date is a Form AA01 filing at Companies House, with the standard rule that the new period cannot exceed 18 months and the date can only be shortened, or extended in narrowly defined circumstances.

Worked example: four SPVs, one refurbishment year

HoldCo Ltd owns 100% of four property SPVs (Northbridge SPV, Southbridge SPV, Eastbridge SPV, Westbridge SPV). All five companies have a 31 March year-end. The 2026/27 results across the four SPVs:

• Northbridge SPV: rental profit £40,000.
• Southbridge SPV: rental profit £55,000.
• Eastbridge SPV: rental profit £28,000.
• Westbridge SPV: rental loss £(60,000), driven by a deep refurbishment and a four-month void.

All four SPVs let to arm's-length tenants and fall within the s.18N CTA 2010 carve-out, so they are NOT close investment-holding companies; they each access marginal relief subject to the associated-company-divided thresholds. With one HoldCo and four SPVs, the group has five associated companies. The 2026/27 thresholds per SPV are £50,000 ÷ 5 = £10,000 (small profits rate ceiling) and £250,000 ÷ 5 = £50,000 (main rate floor). The marginal rate on profits in the £10,000 to £50,000 band is 26.5% (the headline 25% plus the 3/200 marginal relief fraction).

Without group relief, Westbridge SPV's £60,000 loss carries forward against its own future profits. The other three SPVs pay corporation tax with marginal relief applied per company:

• Northbridge (£40,000 profit): main rate £40,000 × 25% = £10,000, less marginal relief (£50,000 − £40,000) × 3/200 = £150. Tax £9,850.
• Southbridge (£55,000 profit): above the main rate threshold, no marginal relief. Tax £55,000 × 25% = £13,750.
• Eastbridge (£28,000 profit): main rate £28,000 × 25% = £7,000, less marginal relief (£50,000 − £28,000) × 3/200 = £330. Tax £6,670.
• Total tax paid in 2026/27: £30,270.

With group relief, Westbridge's £60,000 loss is surrendered across the three profitable SPVs. A common pattern is to surrender against the largest profit first (£55,000 to Southbridge), leaving £5,000 of loss for Northbridge. Post-relief:

• Southbridge: £55,000 − £55,000 surrender = £0 taxable. Tax: £0.
• Northbridge: £40,000 − £5,000 surrender = £35,000 taxable. Main rate £8,750, less marginal relief (£50,000 − £35,000) × 3/200 = £225. Tax £8,525.
• Eastbridge: unchanged at £28,000. Tax: £6,670.
• Total tax paid in 2026/27: £15,195.

Cash tax saved in the year: approximately £15,075. The £60,000 loss has been utilised against profits taxed at a blend of the main rate (Southbridge's profits in the £50,000+ band) and the 26.5% marginal rate (Northbridge's profits in the £10,000 to £50,000 band), rather than carried forward for two or three years. The time value alone, at a typical property finance rate of 5% to 7%, is worth £1,500 to £3,000 over the deferral period.

Where the SPVs were CIHCs (typically connected-party lets), the maths simplifies to a flat 25% saving on the £60,000 loss (£15,000 cash saving) because no marginal relief is in play. The figures land in a similar place but the mechanic is different. Always check CIHC status before applying the maths.

Capital losses: section 171A TCGA 1992 instead

Where a property SPV sells a property at a loss, the resulting capital loss is not surrenderable under group relief. The parallel mechanism for capital losses sits in section 171A of the Taxation of Chargeable Gains Act 1992.

The mechanic. Where two companies are in a 75% capital gains group (similar but not identical test to the income-tax group relief test) and one has a gain and the other a loss in the same accounting period, the companies can elect to treat the gain as having been made by the loss-making company. The election is a joint one, signed by both companies, and must be made within two years of the end of the accounting period in which the gain or loss arose.

The effect is to bring the loss and the gain into the same company, where they net off and only the residual is chargeable. The election does not require any actual transfer of the property: it is a statutory deeming that treats the disposal as if it had been made by the other company. This is one of the most-underused tools in property group tax planning, partly because it requires forward thinking at the point of disposal rather than at the year-end.

A separate provision in section 171 of TCGA 1992 allows intra-group transfers of assets to be made on a no-gain-no-loss basis, so an asset can be moved from one group SPV to another without crystallising a gain. The no-gain-no-loss rule sits alongside the section 171A loss reallocation but does a different job.

How the claim is made on the CT600

The mechanics of making a group relief claim are administrative rather than complex. The claimant company enters the surrender on box 309 of its CT600 corporation tax return and completes a supplementary form CT600C providing the detail of each surrendering company, the amount surrendered, and the type of surrendered amount. The surrendering company also completes a CT600C showing what it has surrendered and to whom.

Critically, the surrendering company must provide a written notice of consent to the surrender, signed by a director or company secretary. The notice can be issued at any time during the claim window. HMRC will reject a claim that is not supported by a notice of consent at the time of submission. The notice is short (typically a one-page document) but a missing notice is the single most common reason a routine group relief claim is initially refused.

The claim window is two years from the end of the claimant company's accounting period, extendable in line with any HMRC notice to file later. Where year-ends are aligned, all SPVs in the group can file their CT600s in a single accounting cycle with all surrenders and claims pre-agreed; this is the model we recommend for any group of four or more SPVs.

The cash effect is reflected as a payable between group companies. SurrenderCo has given up a loss that would have saved £X of its own future tax; ClaimCo has received a benefit worth £X of current tax saved. The two companies usually settle the value internally by way of a group relief payment from ClaimCo to SurrenderCo, recorded as a debit/credit to inter-company balances. The payment is itself not taxable income for the receiving company (section 183 CTA 2010) provided it does not exceed the value of the tax saved.

Consortium relief: when it applies to property groups

Where a property company is owned by 20 or fewer companies, each holding at least 5% but no single company holding more than 75%, the company is "owned by a consortium". A modified form of group relief is available between consortium members and the consortium company under sections 132 to 134 CTA 2010.

Consortium relief is rare in property landlord setups because the typical structure is single-shareholder HoldCo or close-family ownership. It becomes relevant in two situations: where a development project is jointly funded by several unrelated investor companies each taking a minority stake in the development SPV, and where a property fund is structured as a consortium of corporate investors. In both, the loss surrender works on a fractional basis matching each consortium member's ownership percentage.

If your group is straightforwardly one HoldCo and its 100% subsidiaries, consortium relief is not in play and the standard 75% group relief rules apply.

Five failure modes for property groups

The pattern of errors we see most often when reviewing existing property groups' historical group relief claims:

Year-ends not aligned, claims under-utilising the loss. Where one SPV in the group has a December year-end inherited from incorporation and the others have a March year-end, the corresponding-accounting-period apportionment leaves only a fraction of any loss surrenderable. The fix is a one-time Form AA01 to align year-ends. The cost is a stub period of accounts; the saving repeats every loss year forever.

Missing notice of consent at submission. HMRC accepts late filing of the consent in principle, but a CT600C submitted without the supporting consent is initially refused and has to be re-submitted with the consent attached. This usually only costs time, but where the claim is near the end of its two-year window, the delay can run the claim out of time.

Associated company count missed when calculating own-company tax. Independent of group relief, all SPVs in a group are associated companies for the marginal relief threshold purposes. Most BTL SPVs with arm's-length tenants are NOT CIHCs (the s.18N carve-out takes them out) and therefore DO use marginal relief. Where such an SPV has been calculating its own tax on the basis of the full £50,000 / £250,000 thresholds without dividing by the number of associated companies, it has been under-paying. Group relief is a separate question from marginal relief; both need to be applied correctly, and the CIHC question needs to be answered first because it sets which framework applies.

Capital losses surrendered as if they were income losses. A property SPV that has crystallised a £100,000 capital loss on a disposal is not surrendering an income-tax loss. A claim that puts the £100,000 on the CT600 as group relief surrenderable amount will be refused. The right answer is a section 171A election if there is a gain in another group company in the same period, or to leave the loss pooled in the selling company.

HoldCo formed too late, group does not exist at the relevant date. The 75% ownership must be in place at the relevant date for the loss (broadly, throughout the accounting period in which the surrenderable loss arose). Forming a HoldCo half-way through an accounting period in which Westbridge SPV has a loss does not retroactively bring Westbridge into a group with the existing SPVs for that period. The relief is available from the period in which the HoldCo first holds 75%, and prospectively from there.

Linking up with the wider extraction plan

Group relief is one of three corporation tax planning tools that interact with each other in property groups. The other two are intra-group asset transfers (section 171 TCGA 1992 no-gain-no-loss) for moving properties between SPVs without crystallising CGT, and the loss carry-forward rules for any losses not used in the current period.

The director's loan account mechanics that govern how cash gets from the group to the director personally are unchanged by the group structure; each SPV (and the HoldCo) has its own DLA with the director. For the mechanics of how DLAs work in a property company, including the section 455 corporation tax charge and the £10,000 beneficial loan benefit-in-kind, see our director's loan account mechanics guide. For the company-side service-level overview, see our corporation tax accountants for property companies guide.