Corporation tax – Group relief (for P6 (UK))

Test your understanding

(1). MK Ltd is wholly-owned by Mr Pereta who also owns 65% of the ordinary share capital of RT Ltd. MK Ltd had owned two 100% subsidiaries and one 60% subsidiary for many years. In the year ended 31 March 2016 MK Ltd sold CX Ltd, one of its 100% subsidiaries, to JN Ltd. JN Ltd has owned two 80% subsidiaries for many years. None of these companies is dormant.

What is the quarterly payments threshold for CX Ltd for the year ended 31 March 2016?

(2). BG Ltd owns 20% of WF Ltd.

In what circumstances will WF Ltd be able to surrender losses to BG Ltd?

(3). Explain whether the following statements are true or false.

A A company can surrender any amount of trading loss to another company in a group relief group.
B A company can offset any amount of its current period trading loss against its total profits of the previous 12 months