Excessive group relief

M was a UK company that had a subsidiary in the USA. In December 2003 M made a protective claim to group relief in its corporation tax self assessment return for the period ended 31 December 2001 in respect of £1 million losses uncured by the US subsidiary.

The claim was made on the basis that the ongoing case of Marks & Spencer v Halsey which was due to be heard in 2004.

HMRC opened an enquiry and following the opinion of the attorney general in Halsey denied group relief; the assessment was determined as £nil under TMA 1970 s 54.

Subsequently in September 2007 the Revenue issued an assessment under FA 1998 Sch 18 para 76 which enables the department to recover an excessive...