E Section C Theory Rote Flashcards
Gain deferred until it crustalises is earliest of (disposal)
Disposal of replacement asset and is no longer used in the business
Gain deferred until it crustalises is earliest of (ten years)
Ten years after the acquisition of replacement asset
Factors that influence company’s loss relief (rate)
Rate of tax. Highest rate is best use
Factors that influence company’s loss relief (timing)
Timing of relief. Saving tax sooner is beneficial for cash flow
Factors that influence company’s loss relief (QCD)
Extent at which QCD is lost. Restrict carry loss relief to match donations
When do companies form a chargeable gains group?
If there is a 75% shareholding and parent company also has an effective interest of over 50% in each group company
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?
By 31 March 2026
When is an annual exempt amount of £6000 not available?
If gain occurs within limited company
How long must company retain records used in preparing self-assessment coproration tax return?
Six years after the end of the accounting period
Maximum penalty for a failure to retain records for self-assessment corporation tax return?
Up to £3000
When no group relief claim possible?
Not a 75% subsidiary
Do group dividends (dividends received) represent taxable profit?
Not form part of profits
Can the amount surrendered be time apportioned?
Yes
What can happen with a terminal loss?
Trading loss can be relieved against total profits for previous three years, later years first
When must carried forward losses be used before (group)?
Before surrendering losses under carry forward group relief
When is not beneficial to make loss relief claim against total income (QCD)
Income would have otherwise been covered by QCD of £6000
Threshold to be classified as a large company?
£1500000
Short-life asset election benefiical?
Asset is disposed of for less than its TWDV within 8 years of accounting period it was purchased
Short-life asset election no benefit?
Where 100% of AIA can be claimed in respect of the asset
Short-life asset election balancing allowance?
Given when asset is disposed of accelerates allowances rather than being given on a reducing balance basis
Can capital losses be surrendered as part of a group relief claim?
No
Can brought forward losses be group relieved?
To the extent that they cannot be used against the surrendering company’s own total profits
How is group relief deducted?
After b/f trading losses and QCD
When does an accounting period start?
Normally start immediately after the end of the preceding accounting period
How can a brought forward trading loss be relieved?
Against future total profits
How can current trading loss be relieved?
Against total profits of same period then previous 12 months, then carried forward
What can be used as an alternative to iXBRL?
Other software that automatically produces iXBRL accounts and computations could be used
When can a tagging service be used?
To apply the appropriate tags to the accounts and tax computations
When a limited company has a capital loss? (Where is it first set off)
Against any chargeable gains arising in the same accounting period
When a limited company has a capital loss? (After being set off against chargeable gains)
It is then carried forward and set off against the first available chargeable gains of future accounting periods
When must a company send real time PAYE information to HMRC electronically?
By the end of each calendar month (the time when employees are paid)
Choice of loss relief (rate)
The rate at which relief can be obtained
Choice of loss relief (cash flow)
The timing and cash flow in relation to the relief obtained, with an earlier claim generally being preferabl
Choice of loss relief (QCD)
The extent to which relief for qualifying donations will be lost
