Introduction to corporation tax

1. On which income are UK resident companies assessed to corporation tax? 450

2. Basis of assessment for corporation tax. 450
3. Is the accounting period necessarily the same period as the company’s set of accounts? 450
4. What is a Period of Account? 450
5. What is an Accounting Period? 450
6. When does an Accounting Period start? 451
7. When does an Accounting Period end? 451
8. How are long period of account divided in two Accounting Periods? 451
9. What are the advantages of having an Accounting date of 31 March? 452
10. When is a company regarded as a UK resident? 452
11. What is the taxable total profits for a company? 453
12. Are dividends chargeable to corporation tax? 455
13. What are included in the total profits? 454
14. What are Qualifying charitable donations? 455
15. What is a financial year? 457
16. What is the rate of tax applicable for FY2020? 457
17. How to calculate the corporation tax liability when accounting periods straddle 31 March? 457

Taxable Total Profits

1. What are the main adjustments to be made to trading profit for companies?
2. What are the differences relating to companies and individuals?
3. What are the rules for capital allowances in case of companies?
4. What are the rules for pre-trading expenditure in case of revenue expenditure?
5. What are the rules for pre-trading expenditure in case of capital expenditure?
6. How are interest income for a company treated?
7. How are interest paid treated for a company?
8. How are impaired debts treated?
9. How are interests assessed in taxable total profits?
10. How is property income treated in case of companies?
11. What is the treatment for interest on a loan to buy a property for companies?
12. How are property losses treated for companies?
13. What happens in the case of lease premiums?
14. How are donations to charity by companies treated?
15. What happens if the donations exceed the total profits of the company?
 16. How are taxable profits allocated in cases of long periods of accounts?

Losses for Companies

1. How are trading losses calculated?

2. What happens to the TTP computation if a company has made an adjusted trading loss?
3. What are the ways in which a company can offset trading losses?
4. What are the key features of carry forward loss relief?
5. Explain Current year relief.
6. Explain carry back relief.
7. What happens when the loss making period is less than 12 months?
8. What happens when there is a short accounting period prior to a year of loss?
9. Explain the Terminal Loss rules?
10. What are the factors that influence choice of loss relief?
11. What is done to property business losses?
12. What is the treatment for Capital Losses?

Group of Companies
1. What is group loss relief?
2. How is it available to members?
3. Define 75% group relief group.
4. Can groups be created through overseas companies?
5. What are the implications of being in a group relief group?
6. Can loss be surrendered by any member company to any other member of the same group?
7. Can companies transfer losses between each other?
8. Which losses may be surrendered?
9. What is the treatment for QCDs and property losses?
10. How are unrelieved QCDs treated?
11. Can capital losses be surrendered to group companies?
12. Is the percentage holding in a company relevant for determining whether companies are in a
group relief group?
13. How much can a surrendering company surrender?
14. Can brought forward trading and property losses be surrendered?
15. Is there a requirement for the surrendering company to actually claim to relieve a trading loss
against its own profits first?
 16. What does the claimant company do after loss gets surrendered to it?
17. What is the maximum amount of group relief that can be accepted by the claimant company?
18. How is the claim for group relief made?
19. What is a corresponding accounting period?
20. What happens if a company joins or leaves the 75% group?
21. How is the maximum group relief available calculated?
22. What happens if the claimant company pays the surrendering company for the group relief?
23. How is tax loss planning done?
24. What choices does a group member with a loss have?
25. What are the special capital gains advantages available to members of a capital gains group?
26. What is a 75% capital gains group?
27. What are the reliefs that are available to members of a 75% capital gains group?
28. How is a chargeable gain for a company calculated?
29. How is indexation allowance calculated?
30. Is any claim to be made?
31. When does a chargeable gain/loss arise?
32. Transfer of chargeable gains and allowable losses
33. Election to transfer chargeable gains and allowable losses
34. What are the benefits of joint transfer election?
35. How is group rollover relief claimed?

Tax Administration for a company

1. What are the responsibilities that companies have in respect of the self-assessment system?
2. When must the self-assessment tax return be submitted?
3. What are the contents of the return?
4. How are the self-assessment returns filed by companies?
5. What is iXBRL (Inline eXtensible Business Reporting Language)?
6. How are claims to be made?
7. What does a company have to do when its first accounting period begins?
8. What does a company have to do if it does not receive notice to file a tax return?
9. What is the time limit for notifying HMRC of chargeability?
10. What are the consequences for failure to notify HMRC?
11. What happens if a company fails to submit a return?
12. What is a determination assessment?
13. What are the records that need to be kept by companies?
14. Until when must the records be kept by companies?
15. What is the consequence for failure to keep or retain adequate records?
16. Who and by when can make amendments to a tax return?
17. What happens if an error is discovered at a later date?
18. By when should a claim for overpayment relief be made?
19. What is the due date for payment of corporation tax for companies which are not ‘large’?
20. What is the due date for payment of corporation tax for large companies?
21. What is considered a large company?
22. What happens to companies that become large during an accounting period?
23. How is augmented profit calculated?
24. What are the instalment dates for large companies?
25. What is the basis of payment for the instalments?
26. What are the special rules where the accounting period is less than 12 months?
27. How is late payment interest calculated?
28. How is repayment interest calculated?
29. How is the standard penalty calculated by HMRC?
30. What are the penalties for late filing of corporation tax return?
31. What is the penalty for failure to keep and retain records?
32. When are compliance checks made?
33. What is the procedure for compliance checks?
34. What is discovery assessment?
35. What is the time limit for making a discovery assessment?
Chargeable Gains
1. What is Capital Gains Tax (CGT)? (596)
2. Who are known as Chargeable persons? (596)
3. On what disposals are UK resident individuals subject to? (596)
4. On what disposals are non-UK resident individuals subject to? (596)
5. What are the chargeable disposals? (597)
6. What are the exempt disposals? (597)
7. What are the chargeable assets? (598)
8. What are the exempt assets? What happens in their cases? (598)
9. What are the steps that are carried out to compute the capital gains tax
payable by an individual for a tax year?
10. Proforma - individual (chargeable gain/allowable loss)

Disposal proceeds X
Less: Allowable selling costs (X)
Net disposal proceeds X
Less: Allowable Expenditure
Cost of Acquisition (X)
Incidental costs of acquisition (X)
Additional (capital) enhancement expenditure (X)
Chargeable Gain/(Allowable loss) X/(X)

11. What happens in the case where the deal was not made at arm’s
length (e.g. a gift)? In what other cases does the same rule apply?(599)
12. Who is known as connected parties for taxation? (599)
13. What are the allowable expenditures? (600)
14. Where an individual acquires an asset as a gift (or from a sale for less
than market value), what is the cost of acquisition? (600)
15. Where an individual inherits an asset on death, what is the acquisition
cost? (600)
16. Proforma - Capital Gains Tax Payable Computation

Net Chargeable Gains for the tax year X

Less: Annual Exempt Amount (2020/21) (12300)
X
Less: Capital Losses brought forward (X)
Taxable Gains X
CGT Liability (taxable gains X appropriate tax rate) Y
Less: Payment on account re residential property disposals (Y)
CGT Payable Y

17. What happens if the Annual Exempt Amount is not utilised in a

particular tax year? (602)
18. How are the current year capital losses treated or set off? (603)
19. What is done to the unrelieved/unused capital losses? (603)
20. What is done to unused brought forward capital losses? (603)
21. What is the rate of CGT? (605)
22. Are taxable gains taxed first or the taxable income? (605)
23. What happens if the basic rate band in extended due to gift aid
donations or personal pension contributions? (605)
24. Can unused personal allowance be used to reduce taxable gains?
(605)
25. Can taxpayers offset the AEA and capital losses against whichever
gains they choose? (606)
26. What does an individual have to do when he disposes a UK
residential property? (606)
 27. When is payment on account deducted? (606)
28. How is the payment on account due calculated? (606)
29. What if a repayment is due? (606)
30. When is CGT due? (608)
31. What are the CGT planning opportunities? (609)

Computation of Gains: Special Rules

1. What are the rules when an asset is transferred between spouses or civil
partners?
2. Do the rules apply if the spouses or civil partners are separated?
3. What is the deemed acquisition cost of an asset if an asset is subsequently
disposed of after receiving it from their partner?
4. What planning opportunity do these rules provide?
5. How is the deemed cost of part disposed off identified when part of an
asset is disposed off?
6. How are the incidental costs of acquisition or enhancement expenditure on
the part of the asset disposed treated?
7. How are the incidental costs of acquisition or enhancement expenditure on
the whole asset treated?
8. What are chattels?
9. What is a wasting asset?
10. What are wasting and non-wasting chattels?
11. What are the rules for disposal of non-wasting chattels?
12. What are the rules for disposal of wasting chattels?
13. What are the rules for disposal of wasting assets not chattels?
14. What happens when an asset is lost or destroyed and no insurance
proceeds are received?
 15. What happens when an asset is lost or destroyed, subsequently
insurance proceeds are received but no replacement of asset is made?
16. What happens when an asset is lost or destroyed, subsequently
insurance received and the asset is replaced within 12 months?
17. What happens when the insurance proceeds received is partially used
to replace assets within 12 months?
18. Which date is considered as the date of disposal?
19. What are the implications if no insurance proceeds are received?
20. Where an asset is part damaged and compensation is received, what
is the treatment?
21. What happens if assets are damaged for which compensation is
received but the proceeds are not used in restoration work?
22. What happens if assets are damaged for which compensation is
received but the proceeds are fully used in restoration work?

CGT: Shares and securities for individuals

1. What is the treatment for the disposal of shares and securities by an
individual?
2. Define qualifying corporate bond.
3. How is capital gains calculated when shares are traded between
unconnected parties?
4. How is capital gains calculated when shares are either traded as gifts or
transferred to a connected party?
5. What are the identification rules for disposal by individuals to determine
which shares have been disposed of?
6. What is the reason for the 30 day matching rule, “bed and breakfasting”?
7. What is a share pool?
8. What is a bonus issue? How are they treated for CGT purposes?
9. What is a rights issue? How are they treated for CGT purposes?
10. What is reorganisation?
11. What is a takeover?
12. What are the tax consequences where the consideration for the
reorganisation or takeover only involves the issue of shares in the acquiring
company?
13. What are the tax consequences where the consideration includes a
cash element?
14. How is the part disposal computed in case of cash proceeds?