Corporation tax for P6 (UK) - part 1: self-test answers

Test your understanding: answers

(1). Fay can deduct the interest on the loan to acquire the shares in GFL from her net income because GFL is a close company and Fay owns more than 5% of the company.

(2). GFL is a close company because it is controlled by five or fewer shareholders.

(3). GFL has made a loan to one of its passive investors. However, it would not have been required to make a payment to HMRC if all of the following conditions had been satisfied:

  • The loan did not exceed £15,000.
  • The borrower, Lamar, worked full time for GFL.
  • The borrower did not own 5% of GFL.