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CELE SQE1 模拟练习

Examination Timing: 00H00M01S

Kingston Enterprises Ltd has an accounting reference date of 31 December. It commenced trading in April, meaning its first accounting period ended on 31 December of the year in which it began trading. During this first accounting period, the company made neither a trading profit nor a trading loss. However, the company did realise a chargeable gain of £75,000 in November from the sale of a freehold property. The company made no capital losses during this first accounting period. In its second accounting period, which ended on 31 December the following year, the company incurred a trading loss of £45,000. The company made no capital gain and no capital loss during the second accounting period. 


Can the trading loss of £45,000 made in the second accounting period be set off against the chargeable gain of £75,000 from the first accounting period?

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The trading loss of £45,000 incurred in the second accounting period can indeed be set off against the chargeable gain of £75,000 from the first accounting period. This is because the chargeable gain occurred within the 12-month period ending immediately before the accounting period in which the trading loss was incurred. The relevant tax legislation permits the offsetting of trading losses against chargeable gains from the previous accounting period if the gain falls within this specific time frame. Therefore, option C is correct as it adheres to the rules governing the offsetting of trading losses against earlier gains within the specified 12-month period. 


Key Point: This question addresses the rules for offsetting trading losses against chargeable gains in previous accounting periods under UK tax law. The correct understanding is that trading losses can be set against chargeable gains from the preceding 12 months, providing a strategic approach to corporate tax planning.

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