Corporation Tax: Taxable Total Profits

Question 1

Who pays corporation tax?

Answer 1

UK resident companies

Question 2

Scope of corporation tax

Answer 2

Worldwide income
And gains
(For the accounting period)

Question 3

When is a company resident in the UK

Answer 3

Incorporated

Or ‘centrally managed and controlled’

In UK

Question 4

Total income and gains from a company aka

Answer 4

TTP

Question 5

TTP

Answer 5

Taxable total profits

Question 6

Max accounting period for corporation tax purposes

Answer 6

12m

Question 7

CT: When does accounting period start?

Answer 7

When C starts to trade
(Or receive income CT chargeable)

Or when prev AP ends

Question 8

CT: When does AP end

Answer 8

12m after beginning of AP

Or if sooner:
End of C’s period of account
When C ceases to trade

Question 9

What happens for CT if C’s period of account is more than 12m

Answer 9

First 12m is 1 AP
Remainder is a 2nd AP

Question 10

Trading income: Are dividends paid allowable deductions from profit?

Answer 10

No

Question 11

CT: Are dividends received exempt?

Answer 11

Yes

But may impact on payment dates of CT

Question 12

Trading income =

Answer 12

Tax adjusted trading profits
Minus capital allowances

Question 13

Capital allowance available for assets privately used by a director or employee of the company

Answer 13

Full capital allowances available on all assets
(But taxable benefit in kind may arise on the director/employee)

Question 14

Are assets qualifying for 100% FYA for sole traders available for company CT

Answer 14

Yes

Question 15

FYA availability on new (not second hand) plant and machinery
For use in a designated enterprise zone

Answer 15

100%

Question 16

Allowance for capital expenditure not covered by super deduction, AIA or FYA

Answer 16

18% WDA

Question 17

WDA

Answer 17

Writing down allowance

Question 18

AIA amount

Answer 18

200k

Question 19

CT Super amount deduction for
New and unused plant and machinery
In the main pool
(Other than cars)

Answer 19

130%

Question 20

CT super deduction availability dates

Answer 20

1 April 2021
To 31 March 2023

Question 21

Is 100% FYA time apportioned for short accounting periods

Answer 21

No

Question 22

Is the 130% super deduction time apportioned for short accounting periods

Answer 22

No

Question 23

How is rental income from UK properties taxed?

Answer 23

Accruals basis

Question 24

CT:
Is interest payable
On a loan
To acquire or improve property
An allowable expense against property income?

Answer 24

No

Question 25

CT: Relief for: Loan To acquire or improve property

Answer 25

Loan relationship rules

Question 26

CT: How is interest taxed?

Answer 26

Accruals basis

Question 27

What do loan relationship rules determine?

Answer 27

Whether interest payable/receivable is classified as Trading or non-trading

Question 28

Allowability if interest is classified as trading

Answer 28

Allowable Or taxable or part of trading income

Question 29

Allowability if interest is classified as non-trading

Answer 29

Allowable Or taxable as part of NTLR

Question 30

Loan relationship rules: Income (interest receivable): Trading

Answer 30

Only if trade is lending money E.g. banks

Question 31

Loan relationship rules: Income (interest receivable): Non-trading

Answer 31

Any other interest receivable when trade not lending money (I.e. not trading) E.g. repayments of CT

Question 32

Loan relationship rules: Expenses (interest payable): Trading

Answer 32

Overdraft interest Interest payable On loans To purchase Plant and machinery Interest payable On loans/debentures To fund Daily operations

Question 33

Loan relationship rules: Expenses (interest payable): Non-trading

Answer 33

Interest payable on Loan(s) To buy A let property Interest payable On loan(s) To buy Other companies/investments Interest payable On overdue Corporation tax

Question 34

Exempt assets for companies

Answer 34

Same (as STS I think) Except: Gilt-edged securities Plus: Goodwill created On or after 1 April 2022

Question 35

How is CT gain calculated on individual chargeable assets for companies

Answer 35

Same as individuals But companies don’t get AEA

Question 36

How do companies receive relief for charitable donations

Answer 36

Deducting amount paid when calculating taxable total profits Made gross So no grossing-up required

Question 37

How do companies receive relief for charitable donations: Name

Answer 37

QCD

Question 38

QCD

Answer 38

Qualifying charitable donations

Question 39

Basis for reliving QCDs

Answer 39

Cash paid (Not accruals)