Groups (1)

Question 1

Where does a group exist?

Answer 1

For taxation purposes where one company is a subsidiary of another

Question 2

What does group relief provision enable?

Answer 2

Companies within a 75% group to transfer trading losses and certain other losses to other companies within the group

Question 3

What is a group relief provision set against?

Answer 3

Taxable total profits and reduce the group’s overall corporation tax liabiltiy

Question 4

What is 75% group (group relief group)?

Answer 4

Two companies are members of a 75% group where one is a 75% subsidiary of the other, or both are 75% subsidiaries of a third company

Question 5

What is a 75% subsidiary?

Answer 5

At least 75% of the ordinary share capital of subsidary, distributable income of subsidiary, net assets of the subsidiary

Question 6

When may sub-subsidiaries be included in a 75% group?

Answer 6

If ultimate parent has at least a 75% effective interest

Question 7

When may losses generally only be surrendered?

Answer 7

Between UK resident companies

Question 8

What happens for a company which has made a current period loss (the surrendering company)

Answer 8

May transfer all or part of this loss to another member of the 75% group (claimant company)

Question 9

What is the case any amount of loss be surrendered?

Answer 9

So company may specify an amount less than the maximum amount to be surrendered

Question 10

What do excess qualifying charitable donations and property business losses refer to?

Answer 10

Losses in excess of the surrendering company’s other profits (before any loss reliefs) in that period

Question 11

Excess qualifying charitable donations and property business losses must be first offset?

Answer 11

Against surrendering company’s total profits before any remainder can be group relieved

Question 12

What does a claimant company do?

Answer 12

Sets loss against its taxable total profits of same period as surrendering company’s loss-making period

Question 13

Assumption for available profits for group relief calculated?

Answer 13

That the claimant company uses any of its own current period losses first, even if such a claim is not made

Question 14

If the accounting period of a surrendering company and a claimant company are not the same dates?

Answer 14

Only the results of corresponding period are offset under current period group relief. Assuming both available profits and losses must be time-apportioned

Question 15

Current period group relief is only available after the date the subsidiary joins the group if period of acquisition of a 75% subsidiary?

Answer 15

Only the results of corresponding period are offset under current period group relief. Assuming both available profits and losses must be time-apportioned

Question 16

In period of sale of a 75% subsidiary, selling group can only use current period group relief until there are arrangements in place to sell the subsidiary?

Answer 16

Only the results of corresponding period are offset under current period group relief. Assuming both available profits and losses must be time-apportioned

Question 17

Any claim for current period group relief timeframe?

Answer 17

Must be made within two years of the end of claimant company’s profit-making period

Question 18

What must group relief claim be made?

Answer 18

Claimant company’s return supported by statement of consent from surrendering company

Question 19

How can the claimant company make payment to surrendering company?

Answer 19

In return for the loss which is ignored for corporation tax purposes as long asit does not exceed amount of loss surrendered