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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 25 · 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.
Hover-Tech Ltd sold a freehold factory on 1 May 2023, realizing a chargeable gain of £120,000. Aero-Dynamics Ltd purchased a new freehold factory on 1 August 2023.
Can the gain made by Hover-Tech Ltd be rolled over against the acquisition made by Aero-Dynamics Ltd?
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.
Hover-Tech Ltd sold a freehold factory on 1 May 2023, realizing a chargeable gain of £120,000. Aero-Dynamics Ltd purchased a new freehold factory on 1 August 2023.
Can the gain made by Hover-Tech Ltd be rolled over against the acquisition made by Aero-Dynamics Ltd?
Answer options:
No, rollover relief can only be claimed if the same company buys and sells the assets.
Yes, because they are members of the same chargeable gains group.
No, because the new asset was purchased after the old asset was sold.
Yes, but only 50% of the gain can be rolled over.
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