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Q. A ltd has 2 wholly owned subsidiaries B ltd and C ltd
Group companies have following results for y/e 31 march 2018A ltd B ltd C ltd
Trading profit/loss (100000) 20000 83000
Interest income 10000 2000 5000
QCD 0 (22000) (3000)A Ltd is not expected to return its trading operations to profitability untill y/e 31 March 2021. A ltd does not expected significant gains or other income in near future. A ltd’s total profits for y/e 31 march 2017 were 20000 before deduction of QCD of 5000 and tax was paid at rate of 20% on these profits
Calculate corporation tax payable by each of these companies for y/e 31 march 2018 if elections were made to utilize A ltd’s loss in most beneficial manner
Sir here in solution they have deducted 10000 of loss from A ltd total profits of 10000 of y/e 31 march 18, then they have deducted 15000 of loss from A ltd total profit of 20000 of y/e 31 march 17, and then the remaining loss of 75000 they have deducted from C ltd TTP.
Here 1 thing I want to ask that how they have deducted 15000 of loss from A ltd total profit of 20000 of y/e 31 march 17 because in last 12 months partial claims are not allowed , so instead of 15000 of loss they must have deducted 20000 of loss from A ltd total profit of 20000. Please explain me this
Although you are correct that both a current period and carry back claim are against TOTAL Profits which is before deduction of QCD AND that NO partial claims are allowed I suspect that in the answer it would have said that the group relief claim MUST be made first and as the preference is to carry back the loss, to then restrict the group relief claim to 75,000 to leave just 25,000 of loss remaining to then use in a current period claim and leave just 15,000 loss remaining to be carried back and thus avoid wasting the QCD.
Does the answer state the order in which the loss reliefs are claimed??Sir I have again checked the question, but the question just said that
A Ltd is not expected to return its trading operations to profitability untill y/e 31 March 2021. A ltd does not expected significant gains or other income in near future. A ltd’s total profits for y/e 31 march 2017 were 20000 before deduction of QCD of 5000 and tax was paid at rate of 20% on these profits
Calculate corporation tax payable by each of these companies for y/e 31 march 2018 if elections were made to utilize A ltd’s loss in most beneficial manner
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