Company Profits, Losses and Close Companies
Corporation Tax computations, loss use, close-company rules and owner interactions.
How to study the CTA Qualification
Confirm your route first, use the 2026 Finance Act basis, complete the CBEs early and align Awareness, Advanced Technical and APS choices before developing integrated advisory answers.
Core concepts
Concept 1
Build total taxable profits from the company's income and gains streams.
Exam cue: Define the people, entities, transactions and dates relevant to company profits, losses and close companies.
Concept 2
Choose current-period, carry-back, carry-forward or group loss use after testing restrictions.
Exam cue: Select the current CIOT syllabus rule, apply it to the evidence and show any necessary calculation.
Concept 3
Apply close-company rules to loans, benefits and distributions.
Exam cue: State the compliance, professional and practical next step supported by the analysis.
Risk pitfalls and guardrails
Treating company profits, losses and close companies as a memory list without applying the scenario facts.
Guardrail: Do not mix route-specific requirements, choose conflicting Awareness and AT areas, use an obsolete tax rule, assume relief conditions or omit evidence, deadlines and ethics.
Assuming a relief, exemption, route or tax treatment without checking every condition.
Guardrail: Do not mix route-specific requirements, choose conflicting Awareness and AT areas, use an obsolete tax rule, assume relief conditions or omit evidence, deadlines and ethics.
Using an obsolete rule, missing a deadline or omitting the professional-conduct response.
Guardrail: Do not mix route-specific requirements, choose conflicting Awareness and AT areas, use an obsolete tax rule, assume relief conditions or omit evidence, deadlines and ethics.
Memory anchors
Company Profits, Losses and Close Companies — Scope
Build total taxable profits from the company's income and gains streams.
Company Profits, Losses and Close Companies — Rule
Choose current-period, carry-back, carry-forward or group loss use after testing restrictions.
Company Profits, Losses and Close Companies — Method
Apply close-company rules to loans, benefits and distributions.
Company Profits, Losses and Close Companies — Risk
Recognise how associated companies and profit levels affect tax and payment timing.
Company Profits, Losses and Close Companies — Action
Separate company liability from shareholder liability and communicate both.
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 close company pays a director’s personal bill without recording salary or dividend. What is the first tax task?
A company has taxable total profits of £40,000 and no associated companies. At a stated 19% small-profits rate, what tax arises?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
What is Pass Harbor?
Completely free exam prep for 247 UK exams.
- Practice questions
- Flashcards
- Study guides
- Mock exams
- No registration
- No paywall
- Start instantly
“No more expensive exam prep. Quality study tools should be accessible to everyone.”