Chapter 17 - Corporation tax Flashcards
What is the scope of Corporation Tax?
UK resident companies pay corporation tax on TTP
A company is resident in the UK if it is?
1) Incorporated in the UK
2) Has its centre of management and control in the UK
What is an accounting period?
Max 12 months - period for which taxable total profits is calculated
What is a Period of Account?
A period for which a company prepared accounts - a long period of accounts ( > 12 months) must be split into two accounting periods
What is an accounting reference date?
Date to which company prepares accounts
What is the proforma for calculating Total Taxable Profits?
Adjusted trading profit (after capital allowances)
Non-trading loan relationships
Property business profits
Chargeable gains
———————————————-
XXX
(Qualifying charitable donations)
———————————————–
Taxable total profits
How do you treat wages and salaries for corporation tax?
They are allowable for incorporated companies
How do you treat private use of assets in an incorporated company?
100% of the cost incurred is allowable, private use is ignored. There is never a private use column in a companys capital allowance computation
What are three examples of assets that are enhanced capital allowance cannot be used on?
1) Cars
2) Second Hands Assets
3) Assets bought in the final accounting period of trading
How do you treat a main pool item that has received a 130% Super decuction?
Sale proceeds do not reduce MP balance, but instead brought in as a balancing charge
How do you treat a special rate pool that has received the 50% super deduction?
50% of sale proceeds is used to bring down balance on SRP and the other half is used as a balancing charge
When is loan interest allowable for a company?
If the loan was borrowed to:
1) Purchase plant and machinery
2) Provide working capital
3) Purchase property used for trading purposes such as an office, warehouse or factory
