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

Which one of the following is the minimum ownership relationship required for two UK resident companies to form a group for the purposes of surrendering trading losses by way of group relief?

A 75% subsidiary relationship is the minimum. Trading losses can be surrendered by group relief between UK resident companies where one is a 75% subsidiary of the other, or both are 75% subsidiaries of a third company. A 51% or 100% holding is not the test.

  1. A51% subsidiary
  2. B75% subsidiaryCorrect
  3. C90% subsidiary
  4. D100% subsidiary

Explanation

Group relief is available between a parent and its 75% subsidiaries, and between 75% subsidiaries of a common parent. A 51% holding is not enough, and 100% ownership is not required.

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