Corporation Tax - Lecture 8 Flashcards
Corporation tax =
Tax of profits of corporations (ltd/plc) or unincorporated association (club/ political association)
UK resident company liable to CT on
Worldwide income
UK resident company =
One registered in UK or has central control and decision making carried out in UK
Dividends received from other companies
Not liable to CT
Dividends paid
Not allowable trading expense
Classical tax system
- Company pays taxes on all profits whether distributed or not
- Shareholders independent of company (taxed twice)
Imputation tax system
Some tax imputed to shareholders to reduce income tax payable
TTP (taxable total profit) =
Income + Gains - Charges
CAP length
Anything up to 12 months (cannot exceed)
CAP starts when (3)
- Company begins to trade
- Company acquires source chargeable income
- Previous CAP ends
CAP ends when (4)
- 12 months after starts
- Date accounts made up to
- Date company ceases to trade/ winds up
- Date company ceases to be UK resident
Company’s rental income received and short lease premium income is assessable under
Property business profit
Expenses incurred as result renting property
Deductible
Interest paid on loan to purchase rental property
Not deducted as expense
Separate calculation needed
Each rental property