E Reliefs Flashcards
Does goodwill in a company qualify for relief/
Not for a company, does for an individual
Difference between rollover relief for a comapny vs an individual?
Rollover relief for company has indexation allowance
A claim for rollover relief?
Claim must be made within four years of the end of the accounting period in which the gain arises
Relief for reinvesting in depreciating assets company vs individual?
Company and individual has the same treatment
How is current year relief set off?
Against total profits before qualifying charitable donations of the current accounting period
Current year relief treatment?
he claim must be for the whole loss, and must be made within two years of the end of the loss-making accounting period
What happens to losses remaining after set off against current year?
Carried back to the preceding 12 months, and set against total profits before qualifying charitable donations.
When can prior year relief only be claimed?
This claim can only be made after a claim for current year loss relief
What is carry forward relief?
Losses can be carried forward indefinitely, and do not require a current year or prior year claim to be done first
When must a carry forward relief be made?
Within two years of the end of the accounting period in which the loss is relieved
Can property business losses be carried back?
FUCK NO
What comes first, property business losses or trading losses when setting stuff of?
Property business losses
How are property business losses relieved?
Against same accounting period and then future accounting periods
How are capital losses set off?
Against current and then future chargeable gains
Interacting with trading loss relief (what is dealt with first)
Capital loss (current and brought forward)
Interacting with trading loss relief (what is dealt with second)
Trading losses brought forward
Interacting with trading loss relief (what is dealt with third)
Current property business loss
Interacting with trading loss relief (what is dealt with last)
Current and later trading losses
How can group relief claims be restricted?
So that the surrendering company retains sufficient losses to bring its own augmented profits down to the lower limit
What is meant by group relief?
Losses of a surrendering company against the profits of one or more claimant companies for the corresponding accounting period.
Surrendering company in group relief can surrender?
Can surrender any amount of its current period trade losses, unrelieved property business losses and unrelieved qualifying charitable donations
When can brought forward trading and business property losses be surrendered for group relief?
If the surrendering company is unable to use the loss
What is assumed in a claimant company in group releif?
The claimant company uses any of its own current period losses first, even if such a claim is not made
What are profits against which losses can be group relieved?
total profits of a claimant company after deducting the claimant’s b/f unrelieved trading losses, current period trading losses and charitable donations
Where in the computation is group relief deducted?
After QCD
What is the maximum group relief for a corresponding accounting period?
Lower of:
Loss of surrendering company
Taxable total profits of claimant company
When should group releif be claimed?
Within two years of the end of the accounting period in which the loss is relieved
How many chargeable gains group can a company be apart of?
One chargeable gains group
Can a non-UK company be in a chargeable gains group?
Yes
Deemed cost in intragroup transfer for a company?
Cost + indexation
Excess charitable donations?
QCD - property business profits
Calculate loss of surrendering company (group relief)?
Trading losses + brought forward losses
Calculate taxable total profits of claimant company (group relief)?
Trading profits - brought forward losses
What relief is not available for group relief?
Unrelieved capital losses
What is the relationship between surrendering and claimant company?
Surrendering owns claimant
Is trading loss brought forward included in current period group relief?
No
Optimal group relief allocation steps?
Calculate lower and upper limit by dividing by associated companies
Allocate most loss relief to the highes tax rate (which is value between upper and lower limit)
Carry forward group relief for a surrendering company?
A surrendering company can only surrender carried forward losses it can’t deduct from its own profits for the current period
Carry forward group relief for a claimant company use?
Must use its own current period and brought forward losses to the fullest extent possible
How is carry forward relief for a claimant company set against taxable profits?
After all other reliefs for current period but before relief for any amounts carried back from later periods
Loss relief if previous year was for 9 months?
Year before that has total profit * 3/12 as the loss relief
Does POCN apply to group accounts?
It doesn’t, just individual accounts
Calculate tax saved from loss relief (carry forward and group relief)?
Total profits @ rate - taxable profits @ 25% - (£250000-taxable profits * 3/200)
Calculate tax saved from loss relief (current year and carry back)?
Loss relief @ tax rate (if txable profits in upper or lower limit)
Loss relief @ tax rate - ((£250000-taxable profits) *3/200)) ((if taxable profits in marginal relief)
Calculate tax saved from loss relief (carry back relief for year-end 2023)?
Loss relief @ 19%
What determines the form of relief when looking at tax saved?
The taxable profit, unless 2023
Dividends received and corporation tax?
Are exempt
Chargeable gain in LPOA time?
Always included at the final year
Capital allowances in an LPOA?
Always for the final year and time apportioned
Main factor in choosing group relief or loss relief/
The tax rate
When QCD don’t exceed total profits?
There is no excess
Tax saved calculation for group relief?
Group relief * rate (26.5% OR 25% OR 19%)
When can group relief start being claimed?
Only when company joins thje group
Calculate intra-grpup transfer in group relief?
Proceeds - deemed cost. (ALWAYS INCLUDE INDEXATION)
When is group relief only available if company leaves a group?
Arrangements for sale made
Who is responsible for making a group relief claim within 2 years (surrendering or claimant)?
The surrendering company
Where must capital losses be set off against?
ONLY CHARGEABLE GAINS
Base cost of a new warehouse if relevant claim was made?
Indexed original cost
Are building costs included for capital allowance in corporations?
No
When it’s a 130% item?
Balacning charge is done
What is meant by the rent receivable?
Rent for the quarter
When is SBA time-apportioned?
From the date of purchase
