Test your understanding

(1). Axe Ltd owns 90% of the ordinary share capital of Bat Ltd. Bat Ltd in turn owns 70% of the ordinary share capital of Club Ltd. Club owns 100% of the ordinary share capital of Dense Ltd and 80% of the ordinary share capital of Edgy Ltd.

Along with Bat Ltd, which companies form a chargeable gains group with Axe Ltd?

A  Club Ltd only
B  Club Ltd and Dense Ltd only
C  Club Ltd, Dense Ltd and Edgy Ltd
D  No other companies

(2). Green Ltd owns 100% of the ordinary share capital of Blue ltd. For the year ended 31 March 2022, Green Ltd had taxable total profits of £132,000. For the nine-month period ended 31 December 2021, Blue Ltd had a trading loss of £84,000.

How much of Blue Ltd’s trading loss can Green Ltd claim against its taxable total profits for the year ended 31 March 2022?

A  £99,000
B  £84,000
C  £132,000
D  £63,000

(3). Which of the following cannot be surrendered as part of a current year group relief claim?

A  Unrelieved qualifying charitable donations
B  Trading losses
C  Unrelieved property business losses
D  Capital losses

(4). Soup Ltd owns 100% of the ordinary share capital of several loss making companies. The results of Soup Ltd for the year ended 31 March 2022 are:

The loan interest receivable is in respect of a loan which was made for non-trading purposes.

What is the maximum amount of group relief which can be claimed by Soup Ltd for the year ended 31 March 2022?

A  £55,200
B  £35,900
C  £47,700
D  £49,700

(5). Cat Ltd owns 100% of the ordinary share capital of Mouse Ltd. Both companies prepare accounts to 31 December. On 10 June 2021, Mouse Ltd sold an office building, and this resulted in a chargeable gain. On 20 November 2021, Cat Ltd sold a factory and this resulted in a capital loss.

By what date must Cat Ltd and Mouse Ltd make an election if they want their respective capital loss and chargeable gain to be matched?

A  31 December 2023
B  10 June 2023
C  20 November 2023
D  31 December 2021

Answers