SGS 23 (Corporation Tax) Flashcards
What is the test for income ‘tax deductible expenditure’?
wholly and exclusively incurred for the purposes of business
of an income nature
not prohibited (doubtful debts, business expenditure).
How are dividends treated?
Those paid TO shareholders are paid out of taxed profits and not deductible in working out TTP.
Those RECEIVED are exempt from corporation tax and not included in TTP.
Describe rollover relief
Tax deferral which applies where company disposes of a qualifying asset and purchases another qualifying asset within one year prior or three years after.
Not necessary for the assets to be of the same type.
‘Rolls over’ the chargeable gain into the cost of the new asset.
What is a qualifying asset?
land & buildings; fixed plant & machinery; goodwill; ships; aircraft; hovercraft.
What are the two capital allowances?
AIA (first 200,000 of qualifying expenditure in any year)
Capital Allowance (18% value of P&M on reducing balance basis)
Payment deadlines for TTP below £1.5m?
9m and 1 day after the end of relevant accounting period.
Payment deadlines for TTP above £1.5m?
four instalments during the relevant accounting period and the following one.
When does the tax year run and what is it also known as?
Financial year
1st April - 31st March
What can differ to the financial year?
A company’s accounting year.
What can trading losses (income) be offset against?
Current Profits (total)
Previous Year’s Profits (total, same trade)
Future (total, same trade)
Group Relief
What can capital losses be offset against?
chargeable gains in same year
chargeable gains in future years.
(claim must be made to HMRC within four years)
rounding?
If no specific instruction, round DOWN each individual figure to the NEAREST WHOLE POUND in each stage of calculation.
