Chargeable gains planning

By Tolley

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Chargeable gains planning
  • Individual companies
  • Groups of companies

This guidance note is intended to show the various strategies both individual companies and groups of companies can utilise in order to minimise the charge to corporation tax on any chargeable gains that may arise during the accounting period. It is assumed that all companies in the group pay the same rate of corporation tax based on FY 2015 and later rules.

The main benefits of these strategies can be summarised as follows:

  • to ensure that gains arise in group members that are loss making
  • the deferral of the charge to corporation tax to later accounting periods for cash flow advantages, or to benefit from lower rates of corporation tax
  • the maximisation of allowable losses (sometimes referred to as capital losses) where available in order to reduce the net chargeable gain arising within a company or a group
  • to ensure that where possible, gains are negated
Individual companies
Sale of assets that give rise to a gain

In cases where a company is due to sell an asset which will give rise to a gain, consideration should be given to delaying the sale so that the gain is postponed until the next accounting period. This will of course be subject to commercial considerations. This could postpone the corporation tax due on the chargeable gain for 12 months, thereby, providing cash flow benefits. If tax rates are scheduled to fall in the next financial year, then this will provide an additional benefit of a lower tax bill.

See the Corporate chargeable gains guidance note for more details.

The ability to do this would be dependent upon the tax profile of the company in question. It would be counterproductive to push a gain into the next

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