So are there any transition rules for small company corporation tax?

So are there any transition rules for small...

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Does the Finance Act confirm how dividends paid after 1/4/06 out of untaxed pre-31/3/06 profits will be treated for CT - I am hoping they will escape tax!
Doug Scott

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Rebecca Benneyworth profile image
By Rebecca Benneyworth
12th Apr 2006 18:55

More detail
You need to time apportion any period spanning 31 March 2006, splitting the profits either side of that date. Then allocate divis to private shareholders paid before 1 April 06 to profits in the same period. Any divis paid from 1 April 06 onwards have no effect on the tax charge. Any excess NCD's at 31 March 2006 are binned.
Thank goodness they're gone. Don't hold your breath for a new CT return, just ignore the NCD boxes and carry on as normal.

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By Paul Soper
12th Apr 2006 15:57

They will indeed
But of course the profits made from 1 April 2006 onwards will be taxed at 19% straight anyway.

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By User deleted
13th Apr 2006 12:04

Thanks Rebecca, at last a detailed reply. Do you know where we can find the legislation - is there anything on the HMRC website?

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