Glossary · Entity & Business
Corporation Tax
UK Corporation Tax is the tax a UK limited company pays on its profits. For an American owner, the company profits may also be exposed to US tax under the CFC/GILTI rules, with the UK tax available as a credit.
In more detail
A UK limited company pays Corporation Tax on its trading profits, chargeable gains, and investment income. For a US-citizen owner, the same company is usually a controlled foreign corporation, so its profits can also trigger US tax under GILTI/NCTI — with the UK Corporation Tax generally creditable (especially via a Section 962 election). Coordinating the two regimes is essential to avoid surprise US tax on UK-retained profit.
Does Corporation Tax apply to your situation?
Cross-border tax turns on the detail of your circumstances. Book a free consultation and we'll tell you exactly where you stand.