E Section C Theory Rote

Question 1

Gain deferred until it crustalises is earliest of (disposal)

Answer 1

Disposal of replacement asset and is no longer used in the business

Question 2

Gain deferred until it crustalises is earliest of (ten years)

Answer 2

Ten years after the acquisition of replacement asset

Question 3

Factors that influence company’s loss relief (rate)

Answer 3

Rate of tax. Highest rate is best use

Question 4

Factors that influence company’s loss relief (timing)

Answer 4

Timing of relief. Saving tax sooner is beneficial for cash flow

Question 5

Factors that influence company’s loss relief (QCD)

Answer 5

Extent at which QCD is lost. Restrict carry loss relief to match donations

Question 6

When do companies form a chargeable gains group?

Answer 6

If there is a 75% shareholding and parent company also has an effective interest of over 50% in each group company

Question 7

When must a loss relief claim be made if it wishes to set its trading for loss for nine month period ending 31 March 2024?

Answer 7

By 31 March 2026

Question 8

When is an annual exempt amount of £6000 not available?

Answer 8

If gain occurs within limited company

Question 9

How long must company retain records used in preparing self-assessment coproration tax return?

Answer 9

Six years after the end of the accounting period

Question 10

Maximum penalty for a failure to retain records for self-assessment corporation tax return?

Answer 10

Up to £3000

Question 11

When no group relief claim possible?

Answer 11

Not a 75% subsidiary

Question 12

Do group dividends (dividends received) represent taxable profit?

Answer 12

Not form part of profits

Question 13

Can the amount surrendered be time apportioned?

Answer 13

Yes

Question 14

What can happen with a terminal loss?

Answer 14

Trading loss can be relieved against total profits for previous three years, later years first

Question 15

When must carried forward losses be used before (group)?

Answer 15

Before surrendering losses under carry forward group relief

Question 16

When is not beneficial to make loss relief claim against total income (QCD)

Answer 16

Income would have otherwise been covered by QCD of £6000

Question 17

Threshold to be classified as a large company?

Answer 17

£1500000

Question 18

Short-life asset election benefiical?

Answer 18

Asset is disposed of for less than its TWDV within 8 years of accounting period it was purchased

Question 19

Short-life asset election no benefit?

Answer 19

Where 100% of AIA can be claimed in respect of the asset

Question 20

Short-life asset election balancing allowance?

Answer 20

Given when asset is disposed of accelerates allowances rather than being given on a reducing balance basis

Question 21

Can capital losses be surrendered as part of a group relief claim?

Answer 21

No

Question 22

Can brought forward losses be group relieved?

Answer 22

To the extent that they cannot be used against the surrendering company’s own total profits

Question 23

How is group relief deducted?

Answer 23

After b/f trading losses and QCD

Question 24

When does an accounting period start?

Answer 24

Normally start immediately after the end of the preceding accounting period

Question 25

How can a brought forward trading loss be relieved?

Answer 25

Against future total profits

Question 26

How can current trading loss be relieved?

Answer 26

Against total profits of same period then previous 12 months, then carried forward

Question 27

What can be used as an alternative to iXBRL?

Answer 27

Other software that automatically produces iXBRL accounts and computations could be used

Question 28

When can a tagging service be used?

Answer 28

To apply the appropriate tags to the accounts and tax computations

Question 29

When a limited company has a capital loss? (Where is it first set off)

Answer 29

Against any chargeable gains arising in the same accounting period

Question 30

When a limited company has a capital loss? (After being set off against chargeable gains)

Answer 30

It is then carried forward and set off against the first available chargeable gains of future accounting periods

Question 31

When must a company send real time PAYE information to HMRC electronically?

Answer 31

By the end of each calendar month (the time when employees are paid)

Question 32

Choice of loss relief (rate)

Answer 32

The rate at which relief can be obtained

Question 33

Choice of loss relief (cash flow)

Answer 33

The timing and cash flow in relation to the relief obtained, with an earlier claim generally being preferabl

Question 34

Choice of loss relief (QCD)

Answer 34

The extent to which relief for qualifying donations will be lost