Skip to content

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

Gamma Ltd has a 12-month period to 31 March 2026 with a trading loss of £60,000. Delta Ltd, a 75% subsidiary, has a 12-month period to 31 December 2025 with taxable total profits of £100,000. The periods overlap for 9 months. What is the maximum group relief that Delta Ltd can claim from Gamma Ltd?

The maximum claim is £45,000. The overlap is 9 months, so the loss is restricted to £60,000 x 9/12 = £45,000. The claimant's profits for the overlap are £75,000, which is higher, so the loss figure is the limit.

  1. A£60,000
  2. B£45,000Correct
  3. C£100,000
  4. D£15,000

Explanation

Where periods do not coincide, the surrendering company's loss is time-apportioned to the overlap: £60,000 x 9/12 = £45,000. The claimant's profits are also time-apportioned: £100,000 x 9/12 = £75,000. The maximum relief is the lower, £45,000. £60,000 ignores the overlap restriction.

Did you get it right without looking?

One question tells you little. A timed set on The effect of a group corporate structure for corporation tax purposes shows your real accuracy, how long you take and where you lose marks.

Practise The effect of a group corporate structure for corporation tax purposesFree diagnostic mock

More The effect of a group corporate structure for corporation tax purposes questions