Corporation Tax Act 2010 section 628

Company in liquidation: corporation tax rates

Section 628 sets out how to determine the corporation tax rate that applies to a company being wound up, specifically in relation to profits arising in its final or penultimate year of the liquidation period.

• If the main corporation tax rate has been fixed for the company's final year, that fixed rate is used; if only proposed but not yet fixed, the proposed rate is used instead.
• If no rate has been fixed or proposed for the final year, the rate that was fixed or proposed for the penultimate year is applied to the final year's profits.
• Where the winding up started before the final year and the penultimate year's rate has been proposed but not yet fixed, the proposed rate for the penultimate year is used for profits arising during that year.
• In the vast majority of cases, the normal corporation tax rates will apply; the section primarily assists liquidators who need to finalise a company's tax liability before rates have been formally enacted.