corporation tax

Question 1

what is defined as a uk company

Answer 1

they have to ,meet 2 criteria:

1. Company is incorporated in UK or under UK law.
2. If a company is not incorporated in UK or under UK law but it is centrally managed and controlled from UK

Question 2

what does it mean for a company to be centrally controlled in the uk

Answer 2

• Centrally managed or controlled means companies’ major meetings held in UK

Question 3

what difference is there in relation to owners salary is there in corporation taxes income tax computation

Answer 3

owners salary will be an allowed expense in trading profit pf

Question 4

what is the major difference on terms of capital allowances from income to corporation tax

Answer 4

in corporation tax the de-pool concept does not exist

Question 5

what was the tax super deduction?

Answer 5

Only applicable on new plant and machinery- which go into the main pool will attract a FYA of 130% which will be carried out before AIA.

Whereas for special rate pool items are eligible for a FYA of 50% which will be carried out after
AIA has been allocated

Question 6

what is the super deduction not applicable to

Answer 6

• Sole Traders Or Partnerships
• Second hand assets
• Cars

Question 7

what is the basis of assessment in corporation tax

Answer 7

• Corporation Tax is assessed on a company’s income & chargeable gains arise in an accounting period
• Accounting period is not
  necessarily the same period as the company’s set of accounts (period of accounts)

Question 8

what is the period of account

Answer 8

Period of Account:
* 12 months
* Can be shorter & longer

Question 9

what is the accounting period

Answer 9

Accounting Period:
* 12 months
* Can be shorter but cannot exceed 12 months
* Trading Profit in company

Question 10

how are Long Period of Accounts accounted for

Answer 10

A company cannot exceed 12 months. So long period of accounts are divided in two
chargeable accounting periods, 1st period always equal to 12 months and 2nd period for
Balance months

Question 11

what are the rates for tx year 23-24?

Answer 11

the rates are between 19% to 25% based non augmented profits

Question 12

how to calculate the corporation tax

Answer 12

1) find the augmented profit
2)if the augmented profit is below 50000, then tax at 19%

if the augmented profit is above 250000 then tax at 25%

if the augmented profit is in between, do (TTP*25%)- MARGINAL RELEIF

Question 13

WHAT to do with your formulas if the period is less than 12 months?

Answer 13

you have to apportion the upper and lower limits

Question 14

what are associated companies?

Answer 14

companies are associated if one company owns at least 50% of another company

Question 15

what is a dormant company

Answer 15

It is a company that does not carry out trading activities and is not considered an associated company

Question 16

what to do to your upper and lower limits when you have associated companies?

Answer 16

you must apportion them like:
LL/(1+N) OR UL/(1+n)

n= number of associated companies

Question 17

what does it mean if you had an associate company for only a short part of the period?

Answer 17

it doesn’t matter and it must be included in your associate company calculation

Question 18

what does is mean if an associate company is located overseas?

Answer 18

it means nothing and it should still be considered an associate company:

Question 19

till when is indexation factor considered for corporate cgt

Answer 19

if the cgt sale happened before dec 2017 or on December 2017

Question 20

how to treat a loan that is taken for trading purposes

Answer 20

it is treated as an allowable expense and considered in the trading income computation

Question 21

for share disposal how should you calculate selling price

Answer 21

mid price * number of shares

Question 22

how do you calculate the costs associated

Answer 22

matching rules :

-purchase cost on the same day
-any shares purchased in the last 9 days
-share pool or FA85 pool

Question 23

what percentages dictate that there is direct control

Answer 23

75%

Question 24

what percentages dictate that there is indirect control

Answer 24

75%

Question 25

what to do when the financial years don’t match perfectly

Answer 25

1. find overlapping months
2. find profit/ loss for the overlapping months
3. loss then gets transferred

Question 26

when do you consider the ‘joining date’ ?

Answer 26

Actual date of joining

Question 27

when do you consider the leaving date?

Answer 27

arrangement to sell

Question 28

what is the banking of group relief within the groups?

Answer 28

1. any company having augmented profits between 50-250K(effective tax rate is 26.5)
   2.1. any company having augmented profits above 250K( where the legal tax rate is 25%)
   3.1. any company having augmented profits between 50-250K
2. any company having augmented profits less than 50k( where the legal tax rate is 19%)

Question 29

when is the start of the accounting period?

Answer 29

When trading starts
* When any other income is received
* At the end of previous accounting period

Question 30

when is the end of the accounting period?

Answer 30

Earlier Off
* Cessation of Trading
* After 12 months
* At the end of period of account