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12 Cards in this Set
- Front
- Back
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How do companies get tax relief for their pension contributions? |
- deduct it as an expense on a paid basis (i.e. no accruals) - there is no limit on the amount of pension contributions an employer can deduct, but pension spreading may apply. |
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Explain when pension spreading applies. |
Applies to large contributions where: - pension contributions were made in prior year (i.e. pension scheme is not new) - the amount of the pension contribution in the current period exceeds 210% of that paid in the previous period - the amount exceeding 110% of that paid in the previous period is at lease £500,000 (this amount is called the excess) |
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What are the pension spreading bands and fractions? |
- less than £500,000 - no spreading - £500,000 - £1m - 1/2 - £1m - £2m - 1/3 >= £2m - 1/4 |
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How is the non-trading loan relationships figure calculated. What if it is negative? |
- interest receivable - non-trade interest payable - if positive - pay tax on investment income - if negative - there is a deficit. Include nil NTLR in TTP comp, and get loss relief. |
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How are balances relating to intangible fixed assets included in the TTP calculation? |
All within trading profits (e.g. Dr royalty payments, amortisation, loss on sale, Cr profit on sale, revaluation gain) Usually this means no adjustment from accounting profit is needed |
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What is landlord's energy saving allowance? |
Permitted for property income in a company - up to £1,500 per dwelling for loft insulation / draught proofing and hot water system insulation. |
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What constitutes qualifying R&D spend? |
Project must be: - to advance overall knowledge / capability in science / technology - seek to resolve scientific / technological uncertainty. Expenses allowed: - staff directly involved (or relevant portion of staff indirectly involved if allowable under UK GAAP) - consumable / transferable materials - computer software - power, water, fuel - same nature of expenses subcontracted by an SME |
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What are the additional deductions for R&D? |
SMEs - 125% - capped at 7.5m euros per project, then 30% deduction for excess Large companies - 30% NB - R&D capital expenditure gets 100% FYA. |
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What are the thresholds for being considered an SME? |
< 500 employees AND =< 100m euros turnover, or =< 86m balance sheet total |
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In what 3 forms is double taxation relief (DTR) available to companies? |
- treaty relief - treaty sets out which country taxes the income and at what rate - expense relief - foreign income included in the tax comp net of tax (only used if UK tax liability is nil / v small) - unilateral relief - used in all other cases - deduct the lower of foreign tax suffered and UK tax relating to foreign income (same as individuals) |
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Describe how unilateral DTR is given? |
1) include all overseas income gross of WHT in the TTP computation 2) DTR is the lower of: - overseas tax suffered - UK CT attributable to overseas income DTR is a tax credit - cannot create / extend tax repayable. |
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How do qualifying charitable donations interact with double tax relief? |
qualifying donations can be offset against total profits in the most beneficial way: 1) first against UK profits 2) then against overseas income* * if there is more than one source of overseas income, offset against the source suffering the lowest rate of overseas tax first. |
