Skip to content

ACCA Applied Skills · Taxation (UK) · The use of exemptions and reliefs in deferring and minimising corporation tax liabilities

Which statement about the treatment of chargeable gains in a company's corporation tax computation is correct?

Chargeable gains of a company are included in taxable total profits and taxed at corporation tax rates. Companies do not pay capital gains tax, have no annual exempt amount, and cannot set capital losses against trading profits.

  1. AGains are subject to capital gains tax at the lower rate of 18%
  2. BGains are included in taxable total profits and taxed at corporation tax ratesCorrect
  3. CA company is entitled to an annual exempt amount of £3,000
  4. DCapital losses can be set against trading profits of the same period

Explanation

A company's chargeable gains are included in taxable total profits and charged to corporation tax at the applicable rates. Capital gains tax rates and the £3,000 annual exempt amount apply only to individuals. Capital losses can only be set against chargeable gains, not trading profits.

Did you get it right without looking?

One question tells you little. A timed set on The use of exemptions and reliefs in deferring and minimising corporation tax liabilities shows your real accuracy, how long you take and where you lose marks.

Practise The use of exemptions and reliefs in deferring and minimising corporation tax liabilitiesFree diagnostic mock

More The use of exemptions and reliefs in deferring and minimising corporation tax liabilities questions