FAQs - Corporation Tax

1. I am considering going into the market of buying and selling property, and doing so as a business to convert income tax liability to corporation tax liability. Is it true that the Inland Revenue will not allow a business to enjoy the tax advantages of incorporation if all that business does is buy and sell property ? Also are there CGT implications for a business making profits on property or is it just corporation tax liability?

2. If a director loans it's own company money, what is the amount of tax deductible interest that can be charged?

1. Property dealing through a company is an acceptable method of conducting such a business.

There are no CGT implications, as CGT is not payable for dealing/trading.

2. There isn't a set rate. It would need to be a reasonable amount, depending on the circumstances.

Don't forget that the director is taxable on the interest received.