Chargeable gains for companies - question

In this lesson

1. 0:00 Calculating taxable profits for companies
2. 2:02 Setting up the pro forma and identifying adjustments
3. 2:48 Lease premium treatment and deductible expense
4. 4:36 Capital allowances for plant and machinery
5. 5:59 Chargeable gains on share disposals
6. 6:25 Completing the taxable profit calculation

About this lesson

This is a comprehensive worked example that brings together several key tax concepts you'll encounter in TX (Taxation) and requires you to systematically work through operating profit adjustments, lease expense calculations, capital allowance pools, and gains on asset disposals. You'll work through the step-by-step methodology: start with easy wins like operating profit and standard add-backs, then tackle more complex areas including the lease premium split between income and capital elements, capital allowance calculations across main and special rate pools, and chargeable gains with indexation relief. The question covers a car purchase with CO2 emissions (main pool treatment), long-life asset disposal (special rate pool), and share disposal with indexation factors—all of which need careful handling to arrive at the final taxable profit figure. This type of multi-adjustment question is typical of exam requirements where you need to organise information clearly, work methodically through separate calculations, and bring all figures together into a final pro forma. The key is to identify your easy wins first to build confidence, then work through each adjustment systematically to avoid missing any elements or making careless errors under exam conditions.

Duration: 7m