If you operate a group company structure and a non-UK subsidiary makes a loss, can you offset it against the profits of a UK-resident company? If you do not know the answer, you are not alone, as this question has bounced around the UK and European courts for over 10 years. But we may now finally have a resolution.
Historically, UK tax legislation did not allow this type of cross-border group tax relief. Then in 2005 the Court of Justice of the European Union (CJEU) ruled that Marks & Spencer could offset losses from its, now closed, German and Belgian subsidiaries against its UK business. So, from 1 April 2006 the UK law was changed to make it compatible with EU law.