Corporation tax—basic principles
Corporation tax—basic principles

The following Corporate guidance note provides comprehensive and up to date legal information covering:

  • Corporation tax—basic principles
  • Who pays corporation tax?
  • Security deposits
  • What rate is corporation tax charged at?
  • When is corporation tax payable?
  • What is corporation tax charged on?
  • Trading income
  • Property income
  • Income from non-trading loan relationships and non-trading derivative contracts
  • Non-trading gains on intangible fixed assets
  • more


  1. Rates: the rate of corporation tax will fall to 17% for the financial year 2020

  2. UK property business and non-UK resident companies: From 6 April 2020, non-UK resident companies will be brought into the charge to corporation tax in respect of their profits from a UK property business. The changes are contained in section 17 and Schedule 5 to the Finance Act 2019. For more details, see Practice Note: Property income—the corporation tax charge—Territorial scope of corporation tax charge on property income and News Analysis: Corporation tax for non-UK resident companies carrying on a UK property business

Who pays corporation tax?

Corporation tax is payable by 'companies', which includes any body corporate and unincorporated associations.

A company that is tax resident in the UK is generally subject to UK corporation tax on its worldwide profits. A company that is not tax resident in the UK may still be subject to UK corporation tax in certain circumstances, including:

  1. (for disposals of UK land on or after 5 July 2016) in respect of profits from a trade of dealing in or developing UK land, (for more information, see Practice Note: Profits from trading in and developing UK land (transactions in UK land))

  2. if it carries on a trade (other than a trade of dealing in or