Consortium relief allows the surrender of trading losses between which entities?

Consortium relief is a tax mechanism that facilitates the sharing of trading losses among entities that are part of a consortium, specifically between the consortium company and its members. This relief is beneficial because it allows one member of a consortium to utilize the trading losses of another member, thereby reducing the overall tax liability of the group.

This system is designed to support collaboration and investment in joint ventures among companies, where one member may be generating losses while others are profitable. By allowing the surrender of losses, it improves cash flow and provides tax relief which can motivate further investment or continuity of operations in potentially struggling entities.

The other options do not correctly define the parties between which consortium relief applies. It specifically involves members of the consortium rather than customers, subsidiaries of a parent company, or just UK resident companies alone. Therefore, the correct application of consortium relief is between the consortium company and its consortium members, effectively promoting shared tax benefits within a collaborative business environment.