Kala Ltd is an Irish resident company. Its recent results are as follows: Year ended Period ended
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Question:
Kala Ltd is an Irish resident company. Its recent results are as follows:
Year ended | Period ended | Year ended | |
31 December 2018 | 30 June 2019 | 30 June 2020 | |
€ | € | € | |
Case I profit/(loss) | 400,000 | 700,000 | (1,000,000) |
Case III | 35,000 | 50,000 | (42,000) |
Case IV | 8,200 | (1,500) | 3,500 |
Case V profit/(loss) | 3,000 | (4,000) | 5,000 |
Capital gains/(losses) | (15,000) | 9,000 | 8,000 |
Development land gains | 10,000 | 0 | 50,000 |
Trade Charges | (3,000) | 0 | 0 |
Notes
- The capital gains/(losses) noted above are the actual capital gains and losses and have not been adjusted. These transactions related to disposals of shares that did not derive their value from development land.
- The development land gains of €10,000 and €50,000 arose on two sales of development land in June 2018 and April 2020 respectively.
- The trade charges relate to the purchase of a patent royalty that was used for the purpose of the Case I trade.
- Unutilised trading losses from the Case I trade at 1 January 2018 were €10,000.
Required
Calculate the corporation tax payable by the company for each period on the basis that full relief is claimed for all available losses at the earliest opportunity. As part of your answer, clearly explain your treatment of the development land gains.
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078025778
17th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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