CH 2 - Computation of Corporation Tax

Question 1

State formula for marginal relief calcualtion
with & without dividends

Answer 1

with dividends
3/200 x (Upper Limit - Augmented Profits) x (TTP/Augmented profits)

without dividends
3/200 x (Uper Limit - Augmented Profits)

Question 2

What are the limites for marginal relief?

Answer 2

TTP x 19% up to £50,000 of augmented profits
TTP x 25% ‘Marginal relief’ up to £250,000
TTP x 25% over £250,000

For company’s acc. period <12mts limits are adjusted on a pro-rata basis.

Question 3

What represents augmented profit?

Answer 3

TTP + Dividends received $

$ When calculating augmented profits, we exclude dividends received from 51% subsidiaries of the receiving company.