Corporation Tax Flashcards
Corporation Tax-this is paid by UK resident companies and gains for a chargeable accounting period.
The total income and gains of a company is known as their ‘taxable profits’…
Company is resident in the UK if
- it is incorporated in the UK
- it is centrally managed and controlled in the UK.
UK resident companies are chargeable to UK corporation tax on their worldwide profits.
The chargeable accounting period is usually the companies accounting period but can’t exceed twelve months.
When does an accounting period end.
12 months after the beginning of the accounting period..
The end of the company’s period of account.
The company begins/ceases to trade.
The date the company ceases to be residenttttttttt of
TTP
the company’s total income and gains chargeable to corporation tax.
Pro—
Trading Income Property Income Non trading loan relationships (investment interest) Chargeable Gains Mis...
Less Qualifying Charitable Donation…
Trading Income
Net profit per the accounts
Add
Disallowed expenditure Taxable inco(not elsewhere in the accounts)
Deduct
Non trading income taxes elsewhere
Capital Allowances
Adjusted Trading Incomeee…
Main difference
No private use res. for comp
(for individuals the private use is removed from the capital allowances eg MP * 0.18 * 0.5)…
Capital allowances are given for chargeable accounting periods…
Property income
Taxed on the accruals basis
Relief is given under the loan relationship rules…
The LRR determine the treatment of interes.
Loan Relationships
Loan relationship rules apply to interest payable and receiveable.
Interest is paid and received.
To determine the type of interest must determine whether its trading or non trading.
Trading-Banks
Chargeable gainsfor companies.
Corporation tax is charged on any chargeable gains made by a company.
The for chargeable gains is the same as for individuals except for:
- Indexation allowance
- No Annual exemption
- B/f capital losses used in full
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