Corporation tax – Group relief for ATX (UK) - part 4: self-test answers

Test your understanding: answers

(1). FY Ltd will not waste any double tax relief if it relieves all of its UK profits and the UK corporation tax liability in respect of its overseas income equals the overseas tax suffered of £9,000. Accordingly, it needs to have taxable overseas profits of £47,368 (£9,000/19%) and to claim group relief of £214,632 (£190,000 + (£72,000 – £47,368)).

(2). The two companies are members of a group relief group for the five-month period from 1 August 2018 until 31 December 2018. The maximum amount of group relief that may be surrendered is the lower of:

  • 5/12 of the taxable total profits of PH Ltd for the year ended 31 December 2018, and
  • 5/6 of the trading losses of RD Ltd for the six-month period ended 31 December 2018.