The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
The distinction between trading and investment companies is important for a number of reasons. For instance, the rules relating to the expenses which are allowable for tax purposes can differ between the two types of company. Broadly speaking, trading companies are able to deduct allowable revenue expenses from trading income, and investment companies can deduct expenses incurred in managing investments. Further information regarding the deductibility of these types of expenses, together with details of exclusions, can be found in the Management expenses guidance note.
In addition to this, the options available for relieving excess management expenses also differ from trading loss relief, see the Excess management expenses guidance note.
Until 31 March 2004, an investment company was defined as ‘any company whose business consists wholly or mainly in the making of investments and the principal part of whose income is derived therefrom’. This definition is still relevant for certain purposes and is considered in further detail below.
A ‘company with investment business’ is the term used in the legislation for an investment company. It is simply defined as ‘a company whose business consists wholly or partly of making investments’. This is a relaxation from earlier definitions of investment companies, which required the business to consist wholly or mainly of making investments. In addition, there is no longer a requirement that the principal part of the income has to be generated by investments. Consequently, a greater number of companies should be able to claim relief for the expenses of managing their investments, wher
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
If an individual sells a chargeable asset and makes an allowable loss, how can this be relieved?First of all, since the simplification of capital gains tax from 6 April 2008, the proforma to calculate a loss is the same as the proforma to calculate a gain. See the Basic calculation principles of
The vast majority of companies will have loan relationships and so will need to consider how they are taxed under the loan relationship rules. There are also specific provisions dealing with relevant non-lending relationships and other deemed loan relationships. Companies are generally taxable on
Tax professionals will often be asked to provide input into the financial statement work undertaken by audit professionals. This guidance note is intended to give an overview of some of the key issues when undertaking audit work.This note is an introduction only and is written on the assumption that
Trust property, which is the subject of a qualifying interest in possession (QIIP), may become chargeable to inheritance tax on the following occasions:•on the death of the beneficiary with the interest in possession•on the death of the beneficiary within seven years after a transfer or lifetime