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Tax Tutor.
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- September 1, 2020 at 6:43 am #582942
Cup Ltd owns 100% of Saucer Ltd. Both companies are UK resident and prepare accounts to 31 March each year.
In the year ended 31 March 2020 Cup Ltd had a trading loss of £150,000. It also had property income of £100,000.
In the year ended 31 March 2020 Saucer Ltd had a trading profit of £180,000 but had a brought forward trading loss of £150,000.
What is the maximum loss that can be surrendered from Cup Ltd to Saucer Ltd for the year ended 31 March 2020, to the nearest £?In the answer provided they write:
Maximum group relief is the lower of:
(i) Cup Ltd’s trading loss = £150,000
(ii) Saucer Ltd’s available profits (after CY and brought forward losses)
= £30,000 (£180,000 – £150,000)However my doubt is that as far as maximum loss that can be surrendered by Cup ltd. is concerned then shouldn’t it be 150000? Had the question stated maxmium amount that can be group relieved or maximum that can be claimed by saucer company then 30000 would have been right.
Thank you!
September 4, 2020 at 8:13 am #583340Read the question – it says from Cup to Saucer – that is 30,000
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