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I did a question in BPP’s revision kit and a co was purchased out of a group by an individual who owned 1 company – but when the tax was calculated the UL & LL were still taking into account the other associates within the group that it had been in. Why is this??
Can anyone please help me for I find this very difficult to understand.
Hi Monet,
This is a bit of a strange point but the theory goes that a company is counted as an associate if it is an associate within the period, regardless of how long it was an associate for.
So I guess if an “associate” is purchased (+1) or sold (+0) it is always counted.
Hope it helps.
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