QUESTION FOUR

a) A UK resident company had UK trading profits of 5,860,000 and overseas property income (net of 35% withholding tax) of 162,500 in the year to 31 March 2022. Calculate the corporation tax liability for the year and the amount of unrelieved foreign tax. (10 Marks)

b) J Ltd has taxable total profits of 950,000 for the year to 31 March 2022 and receives no dividends. The company owns 70% of the ordinary shares of X Ltd and 60% of the ordinary shares of Z Ltd. Z Ltd owns 75% of the ordinary share capital of HRZ Ltd.

• Determine how many related 51% group companies J Ltd has.

• Calculate the profit limit which is used for determining whether or not J Ltd must pay

  corporation tax by instalments.

• Compute the corporation tax liability of J Ltd for the year to 31 March 2022 and state the

  date (or dates) on which this tax is due to be paid (assuming that the company was large for payment by instalment purposes in the year to 31 March 2021).

  (7 Marks)