Corporation tax Flashcards

1
Q

CT rate

A

19% FY17-FY22

FY23 onwards (after 1 April) Main 25%, Small 19%, Marginal relief fraction 3/200, marginal effective rate 26.5%

50k and 250k divided by assoc cos

marginal relief calc - 3/200 x (U-A) x N/A

U upper limit £250k/assoc
A aug profits (TTP + non group div income)
N companys TTP

26.5% marginal relief - applicable when thinbkinbg of cfwd losses to future period where marg ratre applies

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2
Q

Close investment holding companies

A

Small companies and marginal relief do not apply where it is a close inv holding co

25% rate irregardles of profits

CICH = close company whos main activities are NOT :

trading

Letting land to un connected 3rd parties

Holding co of trading or letting group

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3
Q

Dividends received

divs from small cos

small co?

divs from not small cos - exemptions

A

All divs whether received from UK or OSeas cos are subject to same rules

Almost all divs from UK cos are exempt

Divs received from smaller companies exempt if:

  • Received from UK co or a company in qualifying territory
  • Paid out of chargeable profits which have been subject to a CFC apportionment

AND

  • In either case not part of scheme to get tax advantage

Small co = less than 50 emps, and either annual turnover not over 10m euros or BS total not over 10m euros

Divs received by not small cos exempt if one of following applies:

  • Rec’d from company controlled by recipient
  • Related to non redeemable ord shares
  • Rec’d from portfolio holding (less than 10%)
  • Related to trasnaction not designed to reduce UK tax

or

-Related to shares accounted for as liabilities which are not held for unallowable purpose

exempt divs included in exempt ABGH distribs in arriving at aug profit unless received from 51% co

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4
Q

R&D

quali expenditure

merged scheme applies from

external workers and subcontracted expenditure

A

quali exp:

quali rev exp

staff directly involved in R&D

external staff provider

consumables

computer software

power, water fuel

AP’s starting after 1 April 24 = merged scheme RDEC credit

external workers and subcontracted expenditure :

if co subcontracts to (or hires workers from) Unconnected party = 65% payments qualify

Subcontracts to or hires workers from connected company = quali amount lower of:

  • Providers expenditure
  • company’s payment to provider

paying co can elect for provider to be treated as connected

if SME has work contracted to them by large company (or someone not quali for SME) the SME can only claim large co relief

SME must carry out work itself or be undertaken by a university individual who would not qualify in own right

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5
Q
A
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