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So I’m seeing this question pop up quite frequently where they ask what would influence a company’s choice of relief claim. It says that the tax rate at which relief would be obtained is a factor and then it says: 26.5% if marginal relief applies (best use). I don’t understand the 26.5% figure since we use the main rate of 25% even when marginal relief applies.
Please do not get confused with this effective rate.
I dont teach it.
I dont like it
Yes it’s a fact but it confuses students.
For CT purposes remember this:
Loss relief –
1. get any company out of the margin and down to the lower limit. Then if there’s any loss left
2. give losses to companies paying tax at the full rateSimple!
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