The following Corporation Tax guidance note Produced 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 surrounding the availability of indexation allowance on the disposal of company assets and provides information on the rebasing rules for assets held on 31 March 1982. For an overview of the general position regarding company disposals, please refer to the Calculation of corporate capital gains guidance note.
Indexation allowance is given to allow for the effect of inflation on the value of assets and is based on the Retail Price Index (RPI). When calculating the tax position on the disposal of a company asset, indexation allowance is deducted from the unindexed gain but can only reduce it to nil. It cannot create or increase a loss.
Indexation allowance has been frozen with effect from 1 January 2018. For disposals made on or after this date, indexation allowance is only given up to December 2017. No indexation allowance is available for expenditure incurred after 31 December 2017. See also Simon’s Taxes C2.301–C2.303, C2.717 and C2.718.
The indexation allowance is calculated by applying the following fraction to the allowable cost or March 1982 value depending upon whichever is higher and any other allowable expenditure. The allowance is not available on the costs of disposal. The fraction is:
**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
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeWithholding tax may be reduced under double tax treaties (DTT) or European directives, both of which may be subject to making a formal claim.This guidance note outlines the rules for UK withholding tax, and
Terminal loss relief for trade losses in the final 12 monthsTrading losses incurred by a company in the final 12 months leading up to the discontinuance of trade may be carried back for up to three years from the period beginning immediately before that 12-month period. So if the final accounting
Summary of capital allowances on carsThe current capital allowance rates applicable to cars are as follows:Pool typeDescription of carRateLegislationMain rate poolNew and unused cars with CO2 emissions over 50g/km but not more than 110g/km (to be reduced to 50g/km and below from April 2021)18%CAA
The corporate interest restriction (CIR) essentially limits the amount of interest expense a company can deduct from its taxable profits if the interest expense is over £2 million. The actual mechanics of the CIR calculation are highly complex (the legislation is over 150 pages long) and are
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.