Corporation Tax

Question 1

What do we compare to the tax tables for 2023 CT and what do we tax

Answer 1

Compare augmented profits to the tax tables and tax the total trading profits of the company

Question 2

What is Augmented profits
What do we not include

Answer 2

TTP + Dividends received

Do not include - Dividends received from 51% subsidiaries

Question 3

What is a 51% subsidiary (for augmented profits)

Answer 3

Entitled to more than 50% of the profits on distribution
Entitled to more than 50% of the assets in the event of winding up
Owns more than 50% of the share capital

Question 4

What is the CT tax rate for TY 2023

Answer 4

Augmented profit < £50,000 TTP @19%

Augmented profits > £250,000 TTP @ 25%

Between - marginal rate of tax

Question 5

What is the marginal relief formula

Answer 5

3/200* (250,000- AP )* (TTP /AP)

Question 6

How does the relief work

Answer 6

TTP @25% - Marginal relief.

Question 7

Marginal relief for a short period

Answer 7

X= Pro-rota the upper limit
3/200 * (X-AP) * (TTP / AP)

Question 8

CT calculation for year that straddles 2023 (12 months)

Answer 8

TTP * months prior march 19%
TTP * months after march 25%
Marginal relief = (3/200)(Upper limit -AP)- (TTP / AP) * (month after March)

Question 9

CT Calculations for period less than 12 months that straddle 2023

Answer 9

TTP * months prior march 19%
TTP * months after march 25%
Marginal relief = (3/200)(Z -AP)- (TTP / AP) * (month after March)

Z = UP * Months in accounting period /12