The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
Companies are liable to corporation tax on their taxable total profits (TTP). Companies do not pay capital gains tax, but instead the chargeable gains made on disposal of capital assets held by a company attract a corporation tax liability by being added to TTP.
The definition of ‘profits’ includes the following most common items which are covered in more detail below:
dividends which are not exempt
non-trading loan relationship income
property business income
TTP are reduced by qualifying charitable donations (see below). See Example 1 for an illustration of the treatment of qualifying charitable donations and other adjustments.
The calculation of trading profits and the adjustments that must be made for companies is dealt with in the Adjustment of profits ― overview guidance note. The starting point for calculating trading profits is the profit before tax figure in the company’s accounts, adjusted for certain items as specified by tax law.
For example, interest costs incurred on non-trading loan relationships must be added back to the accounting profit in order to arrive at the trading profit figure. Relief for this interest is given instead as a non-trading loan relationship debit. An example of a non-trading loan is one which is used to buy an investme
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