- This topic has 2 replies, 2 voices, and was last updated 8 years ago by
.
- Posts
- Topics: 43
- Replies: 124
- ☆☆
Hi Sir,
I came across this question in a practice bank for F6 re group trading loss relief. I can’t figure out how the loss relief amount is calculated with particulars of qualifying charitable donations.
Q:
Trading loss: (68,000)
Capital loss: (4,000)
Interest income: 5,000
Qualifying charitable donations: (3,000)The provided solution is:
Trading Loss: 68,000
Plus: excess qualifying charitable donations (5,000-3,000) = 2,000
Maximum group relief: 70,000I thought the qualifying charitable donations are wasted, and the relief would have been 68,000 – 5,000 = 63,000? But this amount is not even in the provided multiple choices!
Please help me!
Thank you.
The answer provided will be correct if you have told me the numbers above for interest income and qualifying charitable donations the WRONG way around so that the question actually says interest income 3,000 and qualifying charitable donations 5,000!!
If you have written the numbers above correctly then both the provided answer and your answer would be wrong as the entire trading loss of 68,000 would be available for group relief – there is no requirement to set off trading losses against the company’s own profits first, whereas only excess qualifying charitable donations are eligible for group relief- Topics: 43
- Replies: 124
- ☆☆
Hi Sir,
I have double checked the BPP exercise booklet, and the amounts regarding interest income and qualifying charitable donations are correct. Guess the booklet is wrong, then.
May I ask if suppose the two amounts are reversed respectively, ie interest income is 3000, and qualifying charitable donations are 5000, the maximum group relief will be 68000 + 2000 = 70000? That excessive qualifying charitable donations are not wasted and can be set against other companies’ total profits within the group?
Thank you.
- You must be logged in to reply to this topic.