Part V: Corporation Tax

1. Is itobvious that companies should be taxed on their profits?

2. Explainthe options available to address economic double taxation of companies andshareholders.

3. Are taxbenefits for small businesses such as a reduced rate of corporation tax on ‘smallprofits’ good tax policy?

4. How andwhy is debt treated more favourably than equity for tax purposes, and whatreform options are available to more closely align the tax treatment of debtand equity?

5. What arethe meanings of ‘ordinary share capital’ and ‘beneficial ownership’ in thecontext of corporation tax, and why are they important?

6. What is a‘distribution’? In what circumstances are interest payments treated asdistribution, and is this sensible?

7. What are ‘loanrelationships’? Is the extensive reliance on accounting in this regime andsimilar regimes including for derivates appropriate?

8. What isthe ‘substantial shareholding exemption’ and is it overly generous?

9. How freelyshould it be possible for companies to set losses against profits to reduce taxpayable? Are limits on deducting carryforward losses appropriate?

10. To whatextent should losses from one activity be allowable against profits of another?

11. Should therebe a time limit on carrying losses forward and back?

12. Should thelosses of one taxpayer be available against the profits of another (i.e. shouldlosses be freely transferable?).

13. Should agroup of companies be treated as one tax unit for tax purposes?

14. How doesthe UK define a ‘group’ for trading profits/losses and capital gains taxpurposes, and why are the definitions different?

15. How do taxlosses work within a corporate group? What happens if the group companies arein different jurisdictions?

16. What is a‘close company’ and why are special rules for close companies necessary?

17. Are specialanti-avoidance rules for companies, shares and bonds necessary or is the GAARsufficient?