The following Corporation Tax guidance note by Tolley in association with Jackie Barker of Wells Associates provides comprehensive and up to date tax information covering:
This guidance note explains the general rules and provides an overview of the corporation tax implications of the disposal of company assets.
When a company disposes of an asset by way of sale, gift or in any other manner, a chargeable gain or allowable loss may arise. The receipt of a capital sum in respect of compensation for the damage or destruction of a company asset may also give rise to a chargeable gain.
For tax purposes, a company is liable to corporation tax in respect of its chargeable gains. The total chargeable gains arising in an accounting period are included as part of the company’s taxable total profits and taxed at the rate of corporation tax in force for the relevant financial year. See the Computation of corporation tax guidance note for details of the latest rates.
All companies that are treated as resident in the UK are liable to corporation tax on their chargeable gains.
A non-UK resident company that carries on a trade in the UK via a permanent establishment will be liable to corporation tax on any chargeable gains that arise in respect of the disposal of UK assets.
See the Residence of companies and Permanent establishment guidance notes for further details on determining a company’s residence.
Special rules apply in respect of the calculation of chargeable gains for companies that are part of a group. A company will be grouped with all of its 75% subsidiaries and its subsidiaries’ 75% subsidiaries, etc but only to the extent that a subsidiary
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