Corporation tax for ATX (UK) - part 3: self-test

Test your understanding

(1). RCO Ltd is a UK resident company. It is planning to set up a permanent establishment overseas. What must be true in order for a trading loss made by the permanent establishment to be offset against the income and gains of RCO Ltd?

(2). Explain whether the following statements are true or false.

A  A UK resident company can elect to exclude the profits and losses of any of its overseas permanent establishments from UK corporation tax.

B  The profits of an overseas incorporated subsidiary that also trades exclusively overseas will not be subject to UK corporation tax unless the company is managed and controlled from the UK.