Test your understanding: answers

(1). D Companies form a chargeable gains group if at each level in the group structure, there is a 75% shareholding. Bat Ltd only owns 70% of the ordinary share capital of Club Ltd, so this company (along with Dense Ltd and Edgy Ltd) is not part of Axe Ltd’s chargeable gains group.

(2). B Group relief is restricted to a maximum of £84,000, being the lower of £84,000 and £99,000 (132,000 x 9/12)

(3). D It is not possible to surrender capital losses as part of a current year group relief claim.

(4). C Soup Ltd’s maximum group relief claim is calculated after deducting qualifying charitable donations, and on the assumption that a claim is made for the current year trading loss.  The maximum claim is therefore £47,700 (55,200 + 2,900 – 2,000 – 8,400).

(5). A The election has to be made within two years of the end of the accounting period in which the asset is disposed of outside the group.