CTM01110 | Corporation Tax: introduction: definition of company profits

CTA09/S2 (2)

The profits of a company resident in the UK which are chargeable to CT for any accounting period are:

• its income for that accounting period, except

  • distributions which are exempt by virtue of CTA09/PART9A (see below - this in essence exempts domestic distributions received, as well as many foreign distributions),

  plus

  • its chargeable gains for that period.

  So, for CT, ‘income’ and ‘profits’ are not interchangeable terms.

  CTA09/PART9A deals with the treatment of distributions in the hands of a company recipient. It covers both domestic and foreign distributions received, and exempts them with certain limited exceptions. It was introduced by FA09/SCH14 as part of the major change in treatment of foreign distributions. Previously the exemption for domestic distributions was at ICTA88/S208, which was briefly CTA09/S1285 before FA09/SCH14 came into effect.