Basic principles

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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 developing UK land) in the UK through a permanent establishment (PE), in which case it is subject to UK corporation tax in respect of the profits attributable to its UK PE (for more information, see Practice Notes: What is a UK permanent establishment? and How is a UK permanent establishment taxed?)

  3. •

    if it disposes (directly or indirectly—this includes a sale of shares in a property

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Latest Tax News

Upper Tribunal upholds HMRC’s share loss relief enquiries and notices (Murphy v HMRC)

Tax analysis: In Murphy v HMRC, the Upper Tribunal (UT) dismissed the taxpayer’s appeal and allowed HMRC’s cross-appeal, finding that HMRC’s enquiries and closure notices relating to a claim for share loss relief claimed by the taxpayer and carried back to the previous tax year were validly made.

UT upholds FTT decision on principles of valuation and allocation of consideration in acquisition of care homes (Nellsar v HMRC)

Tax analysis: In Nellsar, the Upper Tribunal (UT) dismissed both parties’ appeals and affirmed the decision of the First-tier Tax Tribunal (FTT). In the context of acquiring care homes as a going concern, the purchase price should, on the basis of accounts compliant with generally accepted accounting principles (GAAP), be allocated to the care home properties using market value rather than depreciated replacement cost (DRC) for the purposes of corporation tax relief on amortisation of goodwill under the intangible fixed assets (IFA) regime and for the purposes of SDLT.

Tax weekly highlights—5 June 2025

This week's edition of Tax weekly highlights includes: (1) the UT decision in Nellsar on valuation, (2) the UT decision in Murphy on the validity of enquiries into share loss relief, (3) News Analysis on the FTT decision in Eyre on entrepreneurs’ relief, and (4) News Analysis on the UT decision in Scatola on the validity of enquiries into an SDLT avoidance scheme.

UT decides enquiries into SDLT avoidance scheme were valid (Scatola and others v HMRC)

Tax analysis: In Scatola, the Upper Tribunal (UT) dismissed the taxpayers’ appeal against closure notices charging stamp duty land tax (SDLT) resulting from a failed avoidance scheme. It also allowed HMRC’s cross-appeal in respect of an alternative discovery assessment.

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