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Acasta Ltd owns 75% of the ordinary share capital of Barge Ltd and 100% of the ordinary share capital of Coracle Ltd. Barge Ltd owns 75% of the ordinary share capital of Dhow Ltd. Coracle Ltd owns 51% of the ordinary share capital of Eight Ltd. Which companies, along with Coracle Ltd, are within Acasta Ltd’s chargeable gains group?Which companies, along with Coracle Ltd, are within Acasta Ltd’s chargeable gains group?
A Barge Ltd, Dhow Ltd and Eight Ltd
B Barge Ltd only
C Barge Ltd and Dhow Ltd only
D None of the other companiesFrom the lecture my understanding was the the parent company will have to satisfy the relationship of >=75% but the examiner report says as follows. Confused.com now
This question tested candidates’ knowledge of the group relationship which is necessary for chargeable gains
purposes. The most popular answer was B, with candidates appreciating that Barge Ltd was included because of
the 75% group relationship with Acasta Ltd (and that Eight Ltd was correspondingly excluded). However, Dhow
Ltd is also included in the chargeable gains group because the 75% group relationship need only be met at each
level, subject to Acasta Ltd having an effective interest of over 50% (and 75% of 75% is 56.25%). So the
correct answer was C75% for losses direct and indirect interest in subsid.
75% direct and 50% indirect for gains groups.
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