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i hv searched this a lot but still getting confused over this point. see whether it is a 75% grp or capital gain grp, can companies set off their capital losses against another comp’s capital gain?
Only if they’re in a gains group (minimum 75% link between each company and principal/parent company has more than a 50% effective interest)
but is this transfer just like how we grp relieve the trading losses or shld an election be made ? like on study hub theres this thing called notional intra grp transfer of assets for which an election shld be made.. is this notional trasnfer nd normal capital loss surrendering 2 different things?
see what i understood from capital gain grp is that suppose – actually this a qtn from kaplan kit where i made a mistake so im using the same example.
cedar lts had trading loss of 19700 nd cgt of 111996. timber ltd is the 100% parent of cedar ltd which has trading loss of 20800 and 8800.what i did was now for cedar bcoz the trading loss assessment is nil the taxable total profit becomes 111996. as its a grp timber can surrender its trading loss right so i set off that. but i thought that the capital loss of 8800 cannot be transfered just ike trading loss bcoz this isnt notional transfer of asset( like no asset being sold with a loss by timber nd election made to treat a that asset having being sold by cedar ) . but in solution theyve set off that 8800 also.
one more thing the qtn also mentioned that we shld assume all claims nd elections r made. so shld we assume that they made a notional asset transfer election?
but is this transfer just like how we grp relieve the trading losses or shld an election be made ? like on study hub theres this thing called notional intra grp transfer of assets for which an election shld be made.. is this notional trasnfer nd normal capital loss surrendering 2 different things?
An election needs to be made. A notional transfer means that the companies make an election to have ‘notionally transferred’ the asset which has resulted in the loss (or gain) to another company PRIOR TO DISPOSAL, so that the company to which the transfer is made is deemed to have made the disposal and therefore the gain (or loss) has arisen in that company.
So a company that has a capital gain and a company that has a capital loss – an election can be made to notionally transfer the asset from one company to the other so that the gain and the loss is deemed to have arisen in the same company and can therefore be matched against each other.
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