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ACCA Applied Skills · Taxation (UK) · The effect of a group corporate structure for corporation tax purposes

Alpha Ltd and Beta Ltd are 75% group companies with 12-month accounting periods ending 31 March 2026. Alpha Ltd has taxable total profits of £90,000 before any group relief. Beta Ltd has a trading loss of £140,000 for the same period. Alpha Ltd claims the maximum group relief. What is the amount of Beta Ltd's loss that remains unrelieved after the claim, available to carry forward by Beta Ltd?

£50,000 of the loss remains. Group relief can only be claimed up to the claimant company's taxable total profits of £90,000, so £90,000 of the £140,000 loss is surrendered. The remaining £50,000 is left with Beta Ltd to carry forward.

  1. A£50,000Correct
  2. B£90,000
  3. C£140,000
  4. D£0

Explanation

Group relief is limited to the claimant company's taxable total profits, which are £90,000 here. Beta Ltd's loss of £140,000 less the £90,000 surrendered leaves £50,000 unrelieved, which Beta Ltd can carry forward. The £90,000 option is wrong because it is the amount surrendered, not the amount left over.

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