TX-Ch-14 to Ch-16

Jet Ltd has deducted some items in its statement of profit or loss for the year ended 31 December 2021.

Identify, by clicking on the relevant boxes in the table below, whether each of the following items of expenditure are allowable or not allowable for computing Jet Ltd's taxable trading profit.

(1) Legal expenses relating to the acquisition of a new 40- year lease on its factory

(2) Cost of arranging a new bank loan to purchase machinery for trade

(3) Write off of an irrecoverable loan to a former employee

(4) Donation to local charity with mention of Jet Ltd's support in programme for fundraising concert (not a qualifying charitable donation)

• (1) Not ALLOWABLE

  (2) ALLOWABLE

  (3) Not ALLOWABLE

  (4) ALLOWABLE

• (1) ALLOWABLE

  (2)ALLOWABLE

  (3) ALLOWABLE

  (4) NOT ALLOWABLE

Rat Ltd started trading on 1 December 2021 and prepared its first set of accounts to 31 March 2023.

What will Rat Ltd's accounting periods be for the period of account to 31 March 2023?

• 4 months to 31 March 2022, 12 months to 31 March 2023

• 4 months to 5 April 2022, nearly 12 months to 31 March 2023

• 12 months to 30 November 2022, 4 months to 31 March 2023

• 16 months to 31 March 2023

Xeon Ltd purchases a newly-constructed office building from a developer for £1,875,000 on 1 March 2022 and starts using it on 1 April 2022. The purchase price includes acquisition costs of £75,000. Xeon Ltd has a 31 December year end.

What are the maximum SBAs available to Xeon Ltd in the year ended 31 December 2022?

• £40,600

• £40,500

• £50,500

• £40,700

Kit Ltd was incorporated and started trading on 1 July 2022 and prepared its first set of accounts to 31 December 2022.

During the six-month accounting period to 31 December 2022, it purchased two vehicles:
Car [1] is used 20% for private purposes by a director of Kit Ltd. What are the capital allowances to which Kit Ltd is entitled for the period to 31 December 2022?

• E3,106

• £3,198

• E4,122

• £6,396

Eminal Ltd purchased 50,000 shares in Vesterama Ltd for £3.50 a share on 6 June 2002. On 6 June 2022, Eminal Ltd sold 15,000 shares in Vesterama Ltd for £70,000. Eminal Ltd prepares accounts to 31 December each year. Indexation factor: June 2002 to December 2017 0.578.

What is Eminal Ltd's chargeable gain or capital loss for the year ended 31 December 2022?

• £12,845 loss

• £105,000 loss

• £0

• £17,500 gain

Crane plc started trading on 1 January 2022. In the year ended 31 December 2022, the

company made an adjusted trading loss of £40,000. In the year ended 31 December 2023

the company will have trading income of £30,000, other taxable income of £6,000 and will make a qualifying charitable donation of £2,700. Crane plc wishes to use carry forward trading loss relief.

What is the most beneficial carry forward trading loss relief claim that Crane plc can make for the year ended 31 December 2023?

• £44,300

• £33,300

• £33,400

• £33,330

Deal Ltd has the following results:
The company wishes to claim relief for its loss as early as possible. What is the unused loss carried forward at 31 December 2023?

• £84,756

• £83,750

• £83,755

• £83,225

Bab Ltd has owned 80% of the ordinary share capital of Boon Ltd for many years. The two companies' results for the year ended 31 December 2022 are as follows:
What is the maximum amount of current period group relief which Boon Ltd can claim from Bab Ltd for the year ended 31 December 2022?

• £38,000

• £31,000

• £36,000

• £32,000

The Daffodil plc group of companies has the following structure:
All companies are resident in the UK except Geranium Inc.

Identify, by clicking on the relevant boxes in the table below, the companies to which Erica Ltd could surrender a trading loss.

(1) Daffodil pic

(2) Geranium Inc
(3) Flora Ltd
(4) Hellebore Ltd

• (1) Yes
  (2) No
  (3) Yes
  (4) No

• (1) Yes
  (2) Yes
  (3) Yes
  (4) No

The Pine plc group of companies has the following structure:
All companies are resident in the UK except Lime Inc.

Identify, by clicking on the relevant boxes in the table below, the companies to which Maple Ltd could transfer a capital loss.
(1) Pine plc

(2) Willow Ltd

(3) Juniper Ltd
(4) Lime Inc

• (1) Yes
  (2) Yes
  (3) Yes
  (4) No

• (1) Yes
  (2) Yes
  (3) Yes
  (4) Yes