Chargeable Gains for Companies (1) Flashcards
Do companies pay capital gains tax?
No
What is included in taxable totals profits and charged to corporation tax
Their net chargeable gains for an accountingq period
How does calculation of taxable gain/loss differ from an individual?
There is a relief called indexation allowance
Different matching rules apply for disposal of shares
Companies can get one relief (rollover relief)
No annual exempt amount available
What is the purpose of having an indexation allowance?
Remove the inflation element of a gain from taxation
When are companies entitled to an indexation allowance?
From the date if acquisition of asset until the earlier of date of disposal of the asset and december 2017
How is indexation factor computed?
Using the percentage rise in the RPi figures
What do original cost and any enhancement expenditure qualify for?
An indexation allowance
What can the indexation allowance not do?
Increase or create a loss
Matching of shares sold is done in whioch order?
- Shares acquired on the same day
- Shares acquired in previous 9 days, if more than one acquisition on a FIFO basis
3/ Shares from FA 1985 pool to 10 days prior to sale
What do FA 1985 share pool keep track of?
Number of shares
Cost of the shares ignoring indexation
Indexed cost of the shares
What are operative events?
Disposals and acquisitions of shares which affect the indexed value of FA 1985 pool
What must be done prior to reflecting each such operative event within the FA 1985 share pool?
A further indexation allowance must be computed from date of last such operative event up to earlier date of operative event concerned and Decemebr 2017
Whata re the amounts deducted from the pool used in?
Computation of chargeable gain, with indexation allowance being difference between cost and indexed cost figures
How must a gain be deferred by a company?
Where proceeds on the disposal of a business asset are spent on a replacement business asset under rollover relief
Is goodwill a qualifying asset/
No
