Chapter 3 - Long Periods of Account Flashcards Preview

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Flashcards in Chapter 3 - Long Periods of Account Deck (10)
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1

Accounting Periods

APs for CT cannot exceed 12 months, but companies can have accounts drawn up for periods up to 18 months

2

Long POA

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

3

Tax Returns

A return must be submitted for each AP where there is a LPOA.

4

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.

5

Capital Allowances

Prepare separate CA comps for each AP. The WDA and AIA will be apportioned for the second AP, FYA is never apportioned

6

Non Trade Profits and Property Business

Split between APs on a time apportionment basis as accruals basis applies.

7

Chargeable Gains

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)

8

QCD Donations

Split between APs depending on the date they were paid

9

Dividends

Split between APs based on the date of receipt of the dividend

10

Computations

Two separate comps are prepared to work out the liability for each AP