Budget 2010: Consortium relief extended
Tax relief rules relaxed to encourage European joint ventures
The UK government has relaxed tax relief rules on consortia in an effort to
encourage UK companies to form joint ventures in Europe.
Under the revised rule announced in today’s Budget, companies based in the
European Union and European Economic Area will be able to offset losses from a
joint venture against profit elsewhere in their company, if they are able to
establish a clear link between the two parties.
The amount of a loss that a company can write off should be in proportion to
its share of investment in the joint venture.
Previously, consortia could only qualify for relief if they could show a link
between the two parties through the UK.
David Norton, tax partner at Deloitte, said that consortium relief was often
used by technology, chemical and retail companies.