Commission Requests The United Kingdom To Implement The Marks & Spencer Ruling Properly

In Finance Act 2006 the UK introduced changes to the group relief rules, ostensibly to ensure compliance with the judgment in the Marks & Spencer case. Many commented, including ourselves, that those changes reflected an overly restrictive interpretation of the judgment and would only give the ability to exercise group relief for cross border losses in extremely rare cases. In particular the guidance to the rules seemed to limit available losses to those which were legally barred from any form of carry forward or use in the local jurisdiction and required the losses to meet that condition on the day after the end of the accounting period. Thus losses which became date expired in the local jurisdiction could not even be used. The Court of Appeal in the Marks & Spencer case in February 2007 considered this time limitation inconsistent with community law.