1a. Corporation Tax - Group Flashcards
Describe the 51% group companies
1. Definition
- what % should it be directly and indirectly
2.Does it incl or exclude the following:
- parent company
- overseas companies
- dormant companies
3. Describe what would happen (exclude / include) if part way through the period the group has a :
CY - joiners & leavers
next period - joiners & leavers
- Control
- more than 50% of share capital owned directly and indirectly
2.
Parent = include
Overseas = include
Dormant = exclude - Current year : joiners = exclude, leavers = include
Next period : joiners = include , leavers = exclude
Describe group relief
1. In regards to losses
2. % holding of direct and indirect
- transfer of losses made by one group company to any other profitable group company
- 75% direct and indirect
Consortium relief
1. Who can the transfer of losses be made by
2. How is the consortium company created
- at lease how many % split between two or more company
- each with over how many %
- no one company with more that how many %
3. What direction can the losses be relieved
- Transfer of available losses made by:
- consortium company UP to the consortium members
- consortium members DOWN to consortium company - 75% split between two or more company
- each with over 5% holding
- no more than 75% holding for one company - Losses can only go up or down never across between consortium members
Describe the group pay arrangement
1. Optional payment scheme
2. Other than in instalments
3. 2Advantages
- at lease one group company pay by instalments
- one group company nominated to pay quarterly instalments for the group
- admin advantage
& saves interest paid
- as overpayments netted off against a underpayments
What’s the rules for a surrendering company in a consortium relief
or group relief
- do they surrender all losses?
Surrendering company don’t have to surrender all
- can surrender any amount
What’s the rules for a claimant company in a consortium relief
or group relief
- in the computation what year can they offset the losses against
- can it be lower than nil
In computation - offset against current year TTP
Can only accept what they can utilise
At best TTP, reduced to nil
What’s the claim date of losses for consortium company and group relief company
2 years after the end of the claimant company’s accounting period
What’s the percentage of a capital gains group
- % of direct
- % of indirect
75% direct
Over 50% indirect
What’s the intro group transfer in a capital gains group
No gain no loss
- automatic treatment
Describe the group rollover reliever in a capital gains group
1. How is it treated
2. How do u defer the gain in a group
Group = treated as a single trade
Defer gains against purchases of qualifying business assets
- When a company leaving the group,
Is SSE available - % holding
- period of owenrship
- what type of company shares is being disposed of
- what happens to any gain if qualified for sse is it liable for corporation tax
- what happens to losses if qualified for sse
- when a company is leaving the group SSE may be available on disposal of shares
- More than 10% holding
- Owned 12 months out of previous 6 years
- Company shares being disposed of = trading company
- Gain = exempt fro corporation tax
- Loss = not allowable deduction from tax comp so won’t reduce the trading profit that’s tax is payable on
Pre - entry capital losses
Describe what happens when a company wants to join the capital gains group
1. What happens to the capital losses b/f
2. When can you utilise the bf capital losses agains gain of their own asset
- held at what date
- or buying from why company for what use
3. Can it used against gains of other group companies
Pre entry capital losses = restricted use
1. Company joining capital gains group with realised capital b/f into the new group = restricted use
2. Can only utilise losses against gains on own assets
- held at date of acquisition or
- bought the asset from outside the group for use in the business
3. Can’t be used agains gains of other group companies
For a capital gains company what 2 possible subsequent events gives rise to gains from a intr group ngnl transfer
- Disposal outside of the group
- Company leaving the group
When is a company that leaves the capital gains group liable for the d grouping charge
- leaves what % group
- within how many years of the inter group transfer event
- would they still need to own the asset ?
Degrouping is charged to a company
- that receives asset at ngnl
- leaves the 75% group
- within 6 years of intro group transfer
- still owns the asset
What’s the calculation of the degrouping charge
Market value at the intr group transfer date
Less: base cost on intra group transfer
= chargeable gain
