Test your understanding
(1). In which of the following situations would the SSE be available in respect of the disposal in the year ended 31 March 2014?
A BK Ltd sold 4% of the ordinary share capital of TW Ltd on 1 June 2013. It had owned 18% of TW Ltd for many years. BK Ltd and TW Ltd are both trading companies.
B DN Ltd purchased 8% of the ordinary share capital of GX Ltd on 1 January 2012. It sold all of the shares on 15 August 2013. DN Ltd and GX Ltd are both trading companies.
C PK Ltd purchased 22% of LV Ltd on 1 July 2010. It sold 16% of the company on 1 March 2013 and will sell all of the remaining shares on 30 September 2013. PK Ltd and LV Ltd are both trading companies.
(2). State whether the following statements are true or false.
A The SSE will relieve a degrouping charge arising on the sale of a company.
B Where shares are sold at a loss, the SSE may prevent a capital loss arising.