ExpertACCA · Question 29 · Corporation Tax Liabilities
Section B: Case 3 - Meridian Logistics Plc
Scenario: Meridian Logistics Plc is the parent company of a cross-border shipping and warehousing group. Meridian Logistics Plc owns 80% of the ordinary share capital of Alpha Ltd. Alpha Ltd owns 90% of the ordinary share capital of Beta Ltd. Meridian Logistics Plc also directly owns 60% of Gamma Ltd. All companies are UK resident and prepare accounts to 31 March.
Question: Alpha Ltd sells a freehold warehouse (a qualifying asset) generating a chargeable gain of £150,000. Within 12 months, Beta Ltd purchases a new freehold warehouse for £800,000.
Can Alpha Ltd roll over its gain into the new asset purchased by Beta Ltd?
Section B: Case 3 - Meridian Logistics Plc
Scenario: Meridian Logistics Plc is the parent company of a cross-border shipping and warehousing group. Meridian Logistics Plc owns 80% of the ordinary share capital of Alpha Ltd. Alpha Ltd owns 90% of the ordinary share capital of Beta Ltd. Meridian Logistics Plc also directly owns 60% of Gamma Ltd. All companies are UK resident and prepare accounts to 31 March.
Question: Alpha Ltd sells a freehold warehouse (a qualifying asset) generating a chargeable gain of £150,000. Within 12 months, Beta Ltd purchases a new freehold warehouse for £800,000.
Can Alpha Ltd roll over its gain into the new asset purchased by Beta Ltd?
Answer options:
No, rollover relief can only be claimed if the same company buys the replacement asset.
Yes, because Alpha Ltd and Beta Ltd are members of the same Chargeable Gains group.
No, because Meridian Logistics Plc does not own 75% of Beta Ltd.
Yes, but only 90% of the gain can be rolled over.
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