Flashcards in Chapter 3 - Long Periods of Account Deck (10)
APs for CT cannot exceed 12 months, but companies can have accounts drawn up for periods up to 18 months
Where the accounts exceed 12 months, it must be split in two APs for tax purposes. The first will always be 12 months and the second will always be the remainder
A return must be submitted for each AP where there is a LPOA.
Preparing the CT Returns
We split the income and gains between the APs. Then calculate trade profit for the entire period by adding back disallowed items. The resulting tax adjusted profits before CAs are then time apportioned between the APs.
Prepare separate CA comps for each AP. The WDA and AIA will be apportioned for the second AP, FYA is never apportioned
Non Trade Profits and Property Business
Split between APs on a time apportionment basis as accruals basis applies.
Split between the APs based on the date of disposal of the asset ie the date of a binding contract of sale (date of exchange of contracts)
Split between APs depending on the date they were paid
Split between APs based on the date of receipt of the dividend