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TX Accumulated Knowledge > E Section Tax Adjusted Profit > Flashcards

E Section Tax Adjusted Profit Flashcards

1
Q

Is personal allowance and AEA available for companies?

A

No

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2
Q

What happens with dividends from 51% group companies?

A

Are excluded from augmented profits. Therefore augmented profits and taxable total profits are the same

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3
Q

If there are no dividends in corporation tax liabiltiy? (Between £50000 and £250000)

A

26.5%

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4
Q

What % does an associate company have?

A

More than 50%

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5
Q

If an associate company is dormant?

A

It is not associated

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6
Q

Amounts not taxable as trading income (investment)

A

Investment income

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7
Q

Amounts not taxable as trading income (non-taxable)

A

Non=taxable income

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8
Q

Amounts not taxable as trading income (capital profits)

A

Capital profits on sale of assets

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9
Q

Capital expenditure and depreciation (allowable or disallowable)

A

Disallowable

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10
Q

Incidental costs incurred in raising share capital (allowable or disallowable)

A

Disallowable

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11
Q

Incidental costs in raising loan agreemnts and loan stocks (allowable or disallowable)

A

Allowable

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12
Q

Interest payable on loans taken out for non-trade purposes (allowable or disallowable)

A

Disallowable

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13
Q

Remuneration of a company director (allowable or disallowable)

A

Allowable

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14
Q

When is relief given for pre-trading expenditure?

A

Pre-trading revenue expenses incurred up to seven years before the start of trading provided that they would have been an allowable trading expense if incurred after the start of trading

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15
Q

Trade purpose loans?

A

Purchase plant and machinery
Provide working capital
Purchase office, warehouse or factory

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16
Q

Non-trade purpose loans?

A

Purchase property which is then let out AND acquire the share capital of another company

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17
Q

Are private use adjustments for capital allowances relevant for corporations?

A

FUCK NO

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18
Q

A short life asset election for corporation tax purposes?

A

Must be made within two years of the end of accounting period of purchase

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19
Q

When does 130% super deduction and 50% first year allowance for capital allowances available?

A

For a two-year period from 1 April 2021 to 31 March 2023

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20
Q

Property income accruals vs cash for corporations?

A

Always accruals

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21
Q

Loan interest payable treatment in corporation tax?

A

It is deducted from non-trade interest receivable

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22
Q

Adjusted trading profit before capital allowances (allocating profit)

A

Time apportion

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23
Q

Capital allowances (allocating profit)

A

Separate computations

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24
Q

Property business profit (allocating profit)

A

Time apportion

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25
Q

Non-trade interest (allocating profit)

A

Accruals

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26
Q

Chargeable gains (allocating profit)

A

Date of disposal

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27
Q

Charitable donations (allocating profit)

A

Date paid

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28
Q

Dividends (allocating profit)

A

Date of receipt

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29
Q

Miscellaneous income (allocating profit)

A

Time apportion

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30
Q

Calculate unindexed gain for corporations?

A

Net consideration - allowable expenditure

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31
Q

Is bank deposit interest included in taxable total profits?

A

YES

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32
Q

Capital allowances in an corporation tax computation?

A

Deducted from trading income

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33
Q

Dividends paid in CT computation?

A

Disallowable

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34
Q

Dividends received in CT computation?

A

Not included in taxable total profits as they’re exempt

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35
Q

Patent royalties in CT computation?

A

Taxed as miscellaneous income

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36
Q

Pre-trading expenditure incurred in seven years prior to the commencement of trade in CT computation?

A

Allowable

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37
Q

Security deposit (Allowable/disallowable)?

A

Disallowable

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38
Q

Insurance (Allowable/disallowable)?

A

Allowable

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39
Q

Initial repairs (Allowable/disallowable)?

A

Disallowable

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40
Q

Advertising (Allowable/disallowable)?

A

Allowable

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41
Q

Accountancy fees (Allowable/disallowable)?

A

Allowable

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42
Q

Compliance check (Allowable/disallowable)?

A

Allowable

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43
Q

Legal fees in connection with varying the terms of loan notes (Allowable/disallowable)?

A

Allowable

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44
Q

Legal fees in connection with the issue of share capital (Allowable/disallowable)?

A

Disallowable

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45
Q

Legal fees in connection with the registration of trade marks (Allowable/disallowable)?

A

Allowable

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46
Q

Construction of new car park (Allowable/disallowable)?

A

Disallowable

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47
Q

Repairing the wall of an office buiilding (Allowable/disallowable)?

A

Allowable

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48
Q

Removal expenses (Allowable/disallowable)?

A

Allowable

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49
Q

Fine (Allowable/disallowable)

A

Disallowable

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50
Q

QCD (Allowable/disallowable)

A

Disallowable

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51
Q

Lease of office equipment (Allowable/disallowable)

A

Allowable

52
Q

Lease of car (Allowable/disallowable)

A

15% disallowable

53
Q

Entertaining staff (Allowable/disallowable)

A

Allowable

54
Q

Entertaining overseas customers (Allowable/disallowable)

A

Disallowable

55
Q

QCD (Allowable/disallowable)

A

Disallowable

56
Q

Gifts to customers (<£50 and not food or drink) (Allowable/disallowable)

A

Allowable

57
Q

Gifts to employees (Allowable/disallowable)

A

Allowable

58
Q

Impairment loss (Allowable/disallowable)

A

Allowable

59
Q

Interest payable (Allowable/disallowable)

A

Allowable

60
Q

Advertising (Allowable/disallowable)

A

Allowable

61
Q

Amortisation (Allowable/disallowable)

A

Disallowable

62
Q

Employee training courses (Allowable/disallowable)

A

Allowable

63
Q

Employee pension contributions (Allowable/disallowable)

A

Allowable

64
Q

Staff party (Allowable/disallowable)

A

Allowable

65
Q

Legal fees renewal of short lease (Allowable/disallowable)

A

Allowable

66
Q

Entertaining UK customers (Allowable/disallowable)

A

Disallowable

67
Q

Political donations (Allowable/disallowable)

A

Disallowable

68
Q

Counselling services (Allowable/disallowable)

A

Allowable

69
Q

Employer class 1 and 1A NICs? (Allowable/disallowable)

A

Allowable

70
Q

Unpaid bonuses (Allowable/disallowable)

A

Disallowable

71
Q

Interest payable (Allowable/disallowable)

A

Allowable

72
Q

Gifts to customers (>£50) (Allowable/disallowable)

A

Disallowable

73
Q

Directors renumeration (Allowable/disallowable)?

A

Allowable

74
Q

Qualifying charitable donations (Allowable/disallowable)?

A

Disallowable

75
Q

Loans to finance the purchase of investment property for letting and shares in other companies (Allowable/disallowable)?

A

Disallowable

76
Q

Depreciation and amortisation of tangible assets used in the trade (Allowable/disallowable)?

A

Disallowable

77
Q

Capital expenditure and depreciation (Allowable/disallowable)?

A

Disallowable

77
Q

Loans to purchase or improve let property (Allowable/disallowable)?

A

Disallowable

78
Q

Qualifying charitable donation (Allowable/disallowable)?

A

Disallowable

79
Q

Non-Qualifying charitable donation (Allowable/disallowable)?

A

Allowable

80
Q

Interest payable on loans and overdrafts taken out for a trading purpose (Allowable/disallowable)?

A

Allowable

81
Q

Incidental costs of raising finance (Allowable/disallowable)?

A

Allowable

82
Q

Pre-trading revenue expenditure incurred seven years before the start of trading (Allowable/disallowable)?

A

Allowable

83
Q

Can companies be assessed to corporation tax for a period exceeding 12 months?

A

No, unlike individuals

84
Q

A short life asset election for corporation tax purposes (duration)?

A

Must be made within two years of the end of accounting period of purchase

85
Q

What plant and machinery qualifies for 130% super deduction or 50% FYA (enhanced capital allowances)?

A

New plant and machinery qualified, not expenditure on second-hand assets. Cars did not qualify for the enhanced capital allowances.

86
Q

Capital expenditure (allowable/disallowable)?

A

Disallowable

87
Q

Interest payable on loans and overdrafts taken out for a non-trading purpose (Allowable/disallowable)?

A

Disallowable

88
Q

Non-trade interest payable?

A

Disallowable

89
Q

Loan interest payable on loans taken out by a landlord company in relation to let property?

A

Disallowable

90
Q

Entertianing UK customers?

A

Disallowable

91
Q

Entertianing overseas customers?

A

Disallowable

92
Q

Advertising expenditure that is pre-trading?

A

Allowable

93
Q

Security deposit?

A

Disallowable

94
Q

Interest payable?

A

Allowable, is calculated and deducted

95
Q

Advertising expenditure that is not pre-trading?

A

Disallowable

96
Q

Patent royalties receivable (relating to trade)?

A

Not deducted in TTP

97
Q

Where is non-trade interest payable deducted in TTP?

A

Against the bank interest receivable

98
Q

Rent and business rates?

A

Allowable

99
Q

Wine and spirits christimas gifts?

A

Disallowable

100
Q

Are capital losses part of a group relief claim?

A

NO

101
Q

Legal fees with an issue of £1 preference shares?

A

Disallowable

102
Q

Legal fees with the issue of loan notes?

A

Allowable

103
Q

Legal fees with the renewal of a 99-year lease of property?

A

Disallowable

104
Q

Legal fees with an action brought against a supplier for breach of contract?

A

Allowable

105
Q

Legal fees with the registration of trade-marks?

A

Allowable

106
Q

Legal expenses for long-term finance?

A

Allowable

107
Q

Legal costs for loan to employee?

A

Disallowable

108
Q

Legal costs for staff employment contracts?

A

Allowable

109
Q

Non-trade loan interest receivable added or subtracted in TTP?

A

Added

110
Q

Non-trade loan interest payable added or subtracted in TTP?

A

Subtracted

111
Q

Is balancing charge time apportioned?

A

NO

112
Q

Is super deduction and FYA negative or positive in the allowances column in capital allowances?

A

Negative

113
Q

Qualifying expenditure for SBA?

A

Buildings, factories and warehouses.

Structures (walls, bridges and tunnels)

114
Q

Are capital allowances part of trading profits?

A

YES

115
Q

How is a lease premium treated in corporation tax?

A

The divided amount is deducted in corporation tax computation

116
Q

Is bank interest included in trading profit?

A

NO

117
Q

Director’s renumeration?

A

Allowable

118
Q

Employer’s Class 1 NIC?

A

Allowable

119
Q

Repairs during a serious flood where damage was not covered by insurance?

A

Allowable

120
Q

Gifts to employees?

A

Allowable

121
Q

Legal fees for issue of share capital?

A

Disallowable

122
Q

Legal fees for renewal of short lease?

A

Allowable

123
Q

Is a 40 year lease considered a short lease?

A

No, so thereby it is disallowable

124
Q

Loan used to purchase property which is then let out?

A

Disallowed

125
Q

Interest payable to finance company’s trading activities?

A

A 0 when computing adjusted trading profit

126
Q

Interest receivable to finance company’s trading activities?

A

Deductible when computing adjusted trading profit

TX Accumulated Knowledge (35 decks)

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