CT Loss Relief Flashcards
what is the value of losses called
tax savings
how to convert loss to tax saving
loss * 12.5%
how to convert tax savings to losss
tax saving / 12.5%
against what trades can a trade loss be used against in same period
any other trading period
against what trades can a trade loss be used against in the following periods
only against the same trade
what is the requirement to bring back trade losses
must be against corresponding periods ie periods of the same length
what is surrendering in relation to groups
when a company gives a loss away to another company within their group
that company can completely receive the loss and use it as their own
can you surrender losses carried forward
no, only current period losses
can losses transfer in both directions between parent and subsidary
ues
what is the definition of a group for loss purposes
if one company is a 75% subsidiary of another
or both 75% subsidiaries of a third
what section number relates to surrendering losses
S420A
what is the surcharge for groups for late filing
normal surcharge
+
group relief restricted (reduced by 25%)
what is the anti avoidance rule for intra group transfer of assets
if a company leaves the group within 10 years of asset transfer, the tax that would have been paid becomes payable by the company that received the asset
can a company transfer capital losses from one company in the group to another
no
how might companies plan capital losses
transfer assets from one company to another no gain no loss
sells both
gain on one
loss on the other
can use capital loss
two types of revenue audits
desk audit
field audit
what does value basis of using losses mean
use losses to reduce corporate tax liability
must get tax savings equivalent value of trading losses
in what order are trade losses used
- against trading profits current period
- against trading profits previous period
- against corp tax in current period on value basis
- against corp tax in previous period on value basis
(these can only be against case 3-5) - carried forward to the next period against the same trade
how to handle trade charges
- add back amount in spl
- identify amount paid
- fax relief for the paid amount
- reduce CT liability before value basis
- excess added to trading losses to be carried forward (in loss memo)
how to handle non trade charges
- add back amount in sopl
- identify amount paid
- tax relief for paid amount
- reduce total profits
