8 - Corporation Tax

Question 1

Corporation tax

Answer 1

Tax on companies taxable profits

Question 2

What is included, deducted and excluded for corporation tax?

Answer 2

Included:
- Trading profit
- Investment income
- chargeable capital gains

Deducted:
- Expenses exclusively for the business
- Qualifying charity donations
- Specified capital allowances

Excluded:
- Dividends received both UK and non UK

Question 3

Does a limited company pay CGT?

Answer 3

Yes, but no CGT exemption. Instead have an index allowance that increases with RPI

Question 4

Are there tax implications for a company paying dividends?

Answer 4

No

Question 5

Trading losses rules (loss relief)

Answer 5

If excess losses then can be offset against previous 12 months

Can be offset against profits in same tax yr before carry back allowed

Loss relief must be claimed with 2yrs

Question 6

Current corporation tax rate

Answer 6

19%

Question 7

When is a companies corporation tax due?

Answer 7

9months and 1 day after end of companies accounting period

Question 8

Close company

Answer 8

5 or fewer shareholders

Question 9

Advantage and disadvantage to a close company

Answer 9

+ interest pod on loans is an allowable deduction for income tax

• There is a tax charge on loans for companies to it’s directors

Question 10

How do you work out a companies residence?

Answer 10

Where central management and control is exercised