17. Groups of companies

Question 1

Who is group relief available to?

What does this % of group relief mean? (3)

Answer 1

Groups with 75% group relief - must be UK but can join group through non UK

• 75% of shares held
• entitled to 75% of divisible profits
• entitled to 75% of assets when dissolved

Question 2

What losses can be surrendered? (3)

Answer 2

• trading losses: current period and brought forward that cannot be used against own total profits)
• unrelieved QCDs
• unrelieved property losses (current period and brought forward)

Note: QCDs and properly losses are unrelieved when they exceed any other income and gains before the deduction of any losses (current year, brought forward or carried back).

Question 3

Can you surrender capital losses?

Answer 3

NO

Question 4

What do property losses, QCDs and trading losses b/f have to be reduced by first before transferred?

Answer 4

Income in that period.

Question 5

What is the proforma for the maximum group loss relief that can be accepted by the claimant company?

Answer 5

Total profits X
Losses brought forward (X)
Current year losses (X)
QCD relief (X)
= Maximum group relief that can be accepted

Question 6

When is group relief deducted?

Answer 6

After QCDs so foot of computation

Question 7

The claim is made by who? by when?

Answer 7

Made by claimant company within two years of end of AP

Question 8

What is the maximum loss that can be surrendered when companies do not have the same year ends?

Answer 8

Lower of:

• loss of surrendering company for corresponding account period (surrendering comp. accounting period)
• taxable total profits of claimant company for corresponding account period (surrendering comp. accounting period)

Question 9

What do you do if the claimant company pays the surrendering company for the group relief?

Answer 9

Payment is ignored as not tax allowable expense or income for either party.

Question 10

75% capital allowances group:

what are the implications of being in a capital allowances relief group? (3)

Answer 10

• assets transferred at no gain no loss
• able to transfer chargeable gains and losses
• rollover relief available on group basis

Question 11

75% capital allowances group:

What is the minimum ownership the parent company needs to have on sub-subsidiaries?

Answer 11

50% ownership.