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Section B - Case 2: Aero-Dynamics Ltd
'Aero-Dynamics Ltd' is a UK resident company manufacturing commercial drones. It owns 100% of 'Hover-Tech Ltd' (UK resident) and 80% of 'Sky-Net Inc' (resident overseas). All companies prepare accounts to 31 March. For the year ended 31 March 2024, Aero-Dynamics Ltd has a trading loss of £400,000. Hover-Tech Ltd has taxable total profits (TTP) of £150,000. Sky-Net Inc has equivalent profits of £200,000.
Which companies form a Group Relief group for trading losses with Aero-Dynamics Ltd?
ACCA · Question 22 · Corporation tax liabilities
Section B - Case 2: Aero-Dynamics Ltd
'Aero-Dynamics Ltd' is a UK resident company manufacturing commercial drones. It owns 100% of 'Hover-Tech Ltd' (UK resident) and 80% of 'Sky-Net Inc' (resident overseas). All companies prepare accounts to 31 March. For the year ended 31 March 2024, Aero-Dynamics Ltd has a trading loss of £400,000. Hover-Tech Ltd has taxable total profits (TTP) of £150,000. Sky-Net Inc has equivalent profits of £200,000.
During the year, Aero-Dynamics Ltd transferred a drone testing facility (a capital asset) to Hover-Tech Ltd. The asset cost £500,000, had a market value of £800,000 at transfer, and a tax written down value of £400,000.
At what value is the transfer deemed to take place for chargeable gains purposes?
Section B - Case 2: Aero-Dynamics Ltd
'Aero-Dynamics Ltd' is a UK resident company manufacturing commercial drones. It owns 100% of 'Hover-Tech Ltd' (UK resident) and 80% of 'Sky-Net Inc' (resident overseas). All companies prepare accounts to 31 March. For the year ended 31 March 2024, Aero-Dynamics Ltd has a trading loss of £400,000. Hover-Tech Ltd has taxable total profits (TTP) of £150,000. Sky-Net Inc has equivalent profits of £200,000.
During the year, Aero-Dynamics Ltd transferred a drone testing facility (a capital asset) to Hover-Tech Ltd. The asset cost £500,000, had a market value of £800,000 at transfer, and a tax written down value of £400,000.
At what value is the transfer deemed to take place for chargeable gains purposes?
Answer options:
£800,000
£400,000
£500,000
£0
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