Corporation Tax calcs for Associated Companies
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ChrisRoberts
New contributor 🐸
Hi All,
I have a query RE. CT calculations for Associated Companies.:confused1:
There are two companies, with one being a wholly owned (100%) subsidiary of the other.
I know the tax rates are divisible by the number of associated companies and so for both companies become:
Lower Limit = £150,000 @ 21%
Upper Limit = £750,000 @ 30%
Both companies will be taxed at the rate of 21%, but I am unsure as to the calculations of one company once the other has been taxed?
My understanding would be to tax the first company at 21%. Then the dividends from the 1st company would be adjusted for whilst calculating the 2nd companies PCTCT. This would then be taxed again at 21%??
Hope that makes sense?!
I look forward to hearing any thoughts....
Cheers,
Chris
I have a query RE. CT calculations for Associated Companies.:confused1:
There are two companies, with one being a wholly owned (100%) subsidiary of the other.
I know the tax rates are divisible by the number of associated companies and so for both companies become:
Lower Limit = £150,000 @ 21%
Upper Limit = £750,000 @ 30%
Both companies will be taxed at the rate of 21%, but I am unsure as to the calculations of one company once the other has been taxed?
My understanding would be to tax the first company at 21%. Then the dividends from the 1st company would be adjusted for whilst calculating the 2nd companies PCTCT. This would then be taxed again at 21%??
Hope that makes sense?!
I look forward to hearing any thoughts....
Cheers,
Chris
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Comments
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Problem solved!
A UK Company is not taxable on any dividends received from another UK company!
Phew!
:001_smile:0