Accountancy Forum

<font color="purple"><font size="3"><b>Sallam to all,

Can someone explain the meaning of this sentence,


"The company which is claiming the loss shall transfer cash to the loss surrendering company equal to the amount of tax payable on the profits to be setoff against the acquired loss."</b></font id="size3"></font id="purple">

"Loss claiming company shall, with the approval of the Board of
Directors, transfer cash to the loss surrendering company equal to the amount of
tax payable on the profits to be set off against the acquired loss at the applicable
tax rate."

Woa.The loss-claiming company would have had a higher profit before claiming group relief.The tax payable at applicable rate on this profit before availing group relief i.e before setting off loss,is to be calculated.The figure that comes,is to be paid to the loss surrendering company in cash with the approval of BOD.