P Ltd is the parent company of a small group. All of the companies in the group are UK resident apart from Q Corporation, which is resident in the USA and trades only in that country. P Ltd and Y Ltd are not associated with one another. The following diagram represents holdings of ordinary shares:

The trading profit or loss of each company for the year to 31 March 2024 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) Calculate the upper and lower limits for each company in the above diagram for the year to 31 March 2024.

(b) Calculate the upper and lower limits for each company in the above diagram for the year to 31 March 2024.

(c) Calculate the corporation tax liability of each company for the year, assuming that group relief is claimed wherever possible and that the most tax-efficient group relief claims are made.

(d) If any of the trading losses are not eligible for group relief, explain any alternative forms of relief that might be available.

Transcribed Image Text:

P Ltd 90% 80% 55% 30% Q Corp. R Ltd S Ltd 15% 80% TLtd Y Ltd.