P Ltd has owned 100% of the ordinary shares in S Ltd since 2008. Both companies are UK resident and both prepare accounts to 30 April each year. Results for the most recent two accounting years are as follows:

P Ltd has come to the conclusion that its loss-making trade will never return to profit.
Accordingly, this trade was closed down on 30 April 2020 and the company will commence a new trade during the year to 30 April 2021. This new trade is expected to yield annual profits of at least £200,000.

Required:

(a) Explain the alternative loss reliefs available in relation to the trading loss of £108,000 incurred by P Ltd for the year to 30 April 2020.

(b) Assuming that the most tax-efficient form of loss relief is chosen, calculate the corporation tax liability of each company for the year to 30 April 2019 and for the year to 30 April 2020.

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year to 30 April 2019 Trading profit Property income Loan interest receivable Dividend from S Ltd Dividends from other companies Gift Aid donations year to 30 April 2020 Trading profit Trading loss Property income Loan interest receivable Dividend from S Ltd Dividends from other companies Gift Aid donations P Ltd 85,000 9,000 27,000 12,600 10,000 (108,000) 16,000 35,000 8,100 10,000 S Ltd 120,000 7,500 3,000 175,000 8,000 3,000