Is it Passive or active income regarding base rate entity tax rate
When deciding if a company is a base rate entity , and therefore pays company tax at the rate of 25%, my understanding is, not more than 80% of the company assessable income can be passive, ie not active business income. When a business is sold out of a company and goodwill, inherently connected with the business is received into the company from the business sale, how is that goodwill income rated, in terms of the base rate of tax the company pays, is it passive or active income ? In this case, the goodwill is a new nett gain for the company ( ie not selling previously purchased goodwill) ie is it therefore a capital gain and included as passive income or is it classified as active business income ?
Another question, is it the case, that if a company sells business assets out of the company, it is the business sale contract date that is the relevant date for tax purposes, not the settlement date. Ie business contract date in May 23 but settlement received in July 23, the relevant year for tax purposes would be 22/23 tax year, not 23/24 tax year, is this correct ? is this always the case or are there exceptions to this ?
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