Question 1

Section B: Case 3 - Meridian Logistics Plc

Scenario: Meridian Logistics Plc is the parent company of a cross-border shipping and warehousing group. Meridian Logistics Plc owns 80% of the ordinary share capital of Alpha Ltd. Alpha Ltd owns 90% of the ordinary share capital of Beta Ltd. Meridian Logistics Plc also directly owns 60% of Gamma Ltd. All companies are UK resident and prepare accounts to 31 March.

Question: Which of the companies form a 75% group for Corporation Tax group relief purposes?

Accepted Answer

Calculate the effective (direct x indirect) ownership percentages. For group relief, the parent must hold at least 75% effectively.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Assuming that because Alpha owns 90% of Beta, Beta is automatically in Meridian's group, forgetting to calculate the effective interest.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 1

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