CAT / FIA FTX Syllabus E. Corporation Tax Liabilities - Scope of corporation tax - Notes ^{1 / 2}

Chargeable entities

Corporation tax is payable by UK resident (e.g. companies).

A UK resident company is any company which is either incorporated in the UK or which is centrally managed and controlled in the UK.

It is charged on the profits (including, chargeable gains) arising in each accounting period.

Charities and local authorities are not liable to corporation tax

Companies can also be:

• Sports clubs

• Political associations which are not run as partnerships

Total profits

Total profits are the total of a company's chargeable income and chargeable gains.

Chargeable income

A company may receive income from various sources. 

All income received must be classified according to the nature of the income.

The main types of income for a company are:

1. Trade income

2. Interest income

3. Property business income

Dividends received from other companies are usually exempt from corporation tax and so not included in total profits.

Chargeable gains

A company is also chargeable to corporation tax on its chargeable gains as part of total profits.