Corporation tax – Group relief for ATX-UK - part 2: self-test

Test your understanding

(1). K Co and FG Ltd are 100% subsidiaries of Q Ltd. K Co is resident in Australia. FG Ltd is resident in the UK but carries on all of its trading activities in Mexico.

Explain whether or not Q Ltd is able to surrender group relief to either or both of these subsidiaries.

(2). P Ltd and S Ltd are members of the WJ Ltd group. Their quarterly payments threshold is £187,500. Their taxable total profits are:

  • P Ltd – £195,000
  • S Ltd – £247,000

There are trading losses available for surrender to these two companies of £30,000.

By reference to the need to pay corporation in instalments only, to which company/companies should the trading losses be surrendered?

(3). RT Ltd has four associated companies. In the 10 months ended 31 January 2024 it has taxable total profits of £35,000.

What will be the reduction in its corporation tax liability if it receives group relief of £30,000?