Company Profits, Gains and Losses
Corporation tax on trading, property, investment and gain components with deductions, reliefs and losses.
How to study the ATT Qualification
Use Finance Act 2025 for the 2026 tax papers, complete the three foundational CBEs early, apply professional ethics throughout and concentrate option practice on the one paper you will enter.
Core concepts
Concept 1
Corporation tax computations aggregate taxable sources, chargeable gains and qualifying deductions for the accounting period.
Exam cue: Establish accounting periods before apportioning profits, limits or rates.
Concept 2
Accounting periods, associated companies and rates affect calculation and payment.
Exam cue: Build taxable total profits from separately calculated components.
Concept 3
Company losses must be classified and relieved under the correct current rules.
Exam cue: Compare loss claims and document the chosen election or carry route.
Risk pitfalls and guardrails
Using accounting profit as taxable total profits without adjustment.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Ignoring associated-company effects on thresholds.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Mixing trading, property and capital loss rules.
Guardrail: Do not use an obsolete tax rate, assume a relief, ignore legal form, submit unsupported information or omit the relevant deadline and ethical response.
Memory anchors
Accounting period
Corporation tax follows company accounting periods subject to statutory limits.
TTP
Tax-adjusted sources and chargeable gains less qualifying deductions produce taxable total profits.
Associated company
Count relevant associated companies when applying divided limits.
Loss type
Identify the loss source before selecting relief.
CTSA
Computation, return, payment and records form one compliance process.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
A tax preparer starts with £200,000 book profit. The ledger includes £12,000 depreciation and £4,000 client entertaining, while the capital-allowance schedule gives £20,000. With no other adjustments, which taxable-profit total should be carried forward?
After all deductions, Cedar Ltd has £40,000 taxable total profits and no associated companies or exempt distributions. How much corporation tax is payable at the 19% small-profits rate?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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