Chapter 15

Question 1

Write out the corporation tax pro forma

Answer 1

(Trading profit, Property income, Non trade Income,Chargeable gains)
/total profits/
(less carry back releif, current year releief, b/f releif)
Less: QCDs
Total profits
Less: Group relief
TTP

Question 2

What is QCD?

Answer 2

A qualifiying charitable donation that reduces down the total income on pro forma calcuation

Question 3

What is augmented profit?

Answer 3

Augmented profit is the new way we work out what tax % we pay on the TTP.
Augmented profit is the TTP + dividends from companies with <50% interest.
This is used to see what rate we use

Question 4

DITT Ltd has taxable total profits for the nine months ended 31 December 2023 of £40,000 and has no dividends received for the year. Calculate the tax liability.

Answer 4

7787

Question 5

Y Ltd has taxable total profits for its year ended 31 March 2024 of £200,000 and has no dividends received for the year. Calculate the tax liability.

Answer 5

49250

Question 6

What 2 things will lower the limits of 50,000 and 250,000?

Answer 6

Pro rata for short period or associated companies

Question 7

What are associateed companies when it comes to augmented profit calcualtions?

Answer 7

Companies linked by >50%. E.g. A owns 51% of B, B owns 52% of C. There are 3 associated companies here.

Question 8

Can associated companies be overseas?

Answer 8

Yes, if over 50% then we include in the augmented calcualtion

Question 9

Can associated companies be dormant?

Answer 9

No do not include dormant companies

Question 10

If A owned 55% of B at the beginning of the accounting period but by the end owned 20% will this still be an assocated company?

Answer 10

Yes! Just needs to be at any point of the accounting period.