Corporation tax v capital gains tax

starface

hi, quick question....

I'm doing an assignment on the "badges of trade" and all the cases surrounding trading income but there is one part i just don't understand. Why do companies want to deduct profits under Capital gains tax at 25% rather than corporation tax at 12.5%. Surely it would be better to deduct profits at 12.5% rather that 25% oris there some major exemptions I'm missing??

Thanks.:D

nompere

Corporation Tax at 12.5% only applies to trading income from trades carried on in Ireland. Just about everything else, including capital gains, gets taxed at 25%.

How a transaction is classified has occupied all sorts of people pretty much since taxes were first introduced.

Here is a link to the first of hundreds of pages written by HMRC on the subject. http://www.hmrc.gov.uk/manuals/bimmanual/bim35000.htm The law there is much the same as here. I wish you much joy in the endless hours of reading ahead of you!

starface

ahh (penny drops). That makes perfect sense. That link is a little scary but very helpful all the same. Thanks a million...

nompere

starface wrote: »

Thanks a million...

It's only hundreds of pages, not a million!