A company sells an investment property for a chargeable gain of £20,000. How is the gain taxed?
Answer and explanation
Correct answer: C. It is included in the company's taxable total profits and taxed at corporation tax rates, with no annual exempt amount
- Step 1: A company is liable to corporation tax on chargeable gains.
- Step 2: Gains are added to profits and taxed at the corporation tax rates.
Answer
It is included in the company's taxable total profits and taxed at corporation tax rates, with no annual exempt amount.
Why not the others: CGT rates do not apply to companies. The annual exempt amount is available only to individuals. The Valuation Office Agency does not tax gains.
Practise more Corporation tax and company gains.
Free questions with an explanation for every one, and full timed ICAEW ACA Certificate Level mock tests.
More Corporation tax and company gains questions
- A UK company with no associated companies has taxable total profits of £180,000 (all trading profits, no dividends) for the 12 months to 31…
- A company has one associated company and taxable total profits of £100,000 for a 12-month period. The limits of £50,000 and £250,000 are div…
- A UK trading company receives a dividend of £20,000 from another UK company in which it holds a 5% shareholding. How is the dividend treated…
- A company's accounting profit is £120,000 after charging depreciation of £15,000 and client entertaining of £3,000. Capital allowances are £…
- A company has a trading loss of £50,000 in the year ended 31 March 2027 and had taxable profits of £80,000 in the previous 12 months. It has…
- What is the effect of the annual investment allowance on a company's purchase of qualifying plant and machinery?