P Ltd is the parent company of a small group. All of the companies in the group
Question:
P Ltd is the parent company of a small group. All of the companies in the group are UK resident apart from Q Corp., which is resident in an overseas country that is not part of the European Economic Area (EEA). Q Corp. does not trade in the UK or in any other EEA country. The following diagram represents holdings of ordinary shares:
The trading profit or loss of each company for the year to 31 March 2021 is as follows:
None of the companies had any other income or gains during the year or made any Gift Aid donations. No dividends were paid during the year.
Required:
(a) Identify the trading losses that may be surrendered to other companies in the group and the companies to which these losses may be surrendered.
(b) Calculate the corporation tax liability of each company for the year, assuming that group relief is claimed wherever possible.
(c) If any of the trading losses are not eligible for group relief, explain any alternative forms of relief that might be available.
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