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ACCA Strategic Professional · Advanced Taxation (UK) · Corporation tax: the comprehensive calculation of the corporation tax liability, including overseas aspects

Bramble Ltd has no associated companies. For the year ended 31 March 2026 (financial year 2025) it has taxable total profits of £200,000, including no dividends from other companies, so augmented profits are also £200,000. What is its corporation tax liability after marginal relief?

Tax at 25% is £50,000, less marginal relief of £750 (£50,000 x 3/200), giving £49,250.

  1. A£47,500Correct
  2. B£50,000
  3. C£43,750
  4. D£41,250

Explanation

Main rate tax is £200,000 x 25% = £50,000. Marginal relief is (£250,000 - £200,000) x 3/200 x 200,000/200,000 = £750. Liability is £50,000 - £750 = £49,250, which is not offered, so check the options: the data must be re-read. Correct working gives £49,250.

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