CTM81625 - Groups: group relief: surrendering company not UK resident: examples: comparison of UK and EEA loss
Example 1
Assume there are differences between UK and foreign measures of income and expenditure. Accounting standards for example may differ concerning recognition of income.
Foreign computation
| Description | Amount |
|---|---|
| Foreign trading loss | (£200) |
| Unrelievable foreign loss | (£200) |
UK recomputation
| Description | Amount |
|---|---|
| UK trading loss (because of UK GAAP conversion*) | (£50) |
| UK measure of losses available for group relief | (£50) |
*Because of differences in income recognition in UK GAAP versus foreign state accounting rules.
»Ê¹ÚÌåÓýapp amount of the trading loss available for surrender is the amount computed on UK tax principles. »Ê¹ÚÌåÓýapp amount here is £50.
Example 2
Foreign computation
| Description | Amount |
|---|---|
| Foreign trading loss | (£200) |
| Unrelievable foreign loss | (£200) |
UK recomputation
| Description | Amount |
|---|---|
| UK trading loss (e.g. because of timing differences*) | (£350) |
| UK measure of losses available for group relief | (£350) |
*(If the differences between the UK and foreign measure of income result from timing issues, so the additional £150 of loss would either have already been recognised in the foreign territory in an earlier period or will be recognised in a later period and so possibly be relievable in a future period.)
»Ê¹ÚÌåÓýapp amount of the trading loss available for surrender is £200.