Similar systems apply in other jurisdictions that are or were closely related to the United Kingdom, such as Ireland and Jersey.
Schedule D is itself divided into a number of cases: Notes: The computations of income and taxable chargeable gains include deductions for direct expenses.
Also a company may incur expenses managing a subsidiary which does not tend to pay dividend income to it.
Subject to specific statute or case law to the contrary, Case I of Schedule D and Schedule A profits are based on profits as calculated using UK Generally Accepted Accounting Practice.
Where a company prepares its accounts under International Financial Reporting Standards, it will use profits computed on that basis instead from 2005 onwards, subject to specific statute or case law to the contrary.
If the finance lessor owns the asset, however, it may be able to make a claim for capital allowances.
These include "integral features" (electrical systems; cold water systems; heating, hot water, ventilating and air conditioning systems; lifts, escalators and moving walkways; and external solar shading), "long-life assets" (plant and machinery with an expected life when new of 25 years or more - subject to various exemptions, i.e. assets in offices and retail shops), and the addition of thermal insulation to existing buildings.
They are also available for qualifying hotels (those with at least 10 letting bedrooms and meeting other conditions) and commercial buildings in specially designated areas of need, called "enterprise zones" (which qualify for a 100% initial allowance, but will also be withdrawn from April 2011).
Tax depreciation is also potentially available for expenditure on: business premises renovation (100% initial allowance), flat conversions (100% initial allowance), research and development (100% initial allowance), mineral extraction (10% or 25% WDAs), know-how (25% WDA), patents (25% WDA), dredging and assured tenancies.
Expenditure on cleaning-up contaminated land and buildings may qualify for 150% "land remediation relief" and adding thermal insulation to residential properties may qualify for a "landlord's energy saving allowance", giving a £1,500 deduction per dwelling.
Gains and losses on loans, derivatives, financial instruments and intangibles are taxed as well as income.
Only direct expenses, such as costs incurred in obtaining a loan, are deductible in the Case III computation.
The figure of 10% is increased to 30% for shares held by the long-term insurance fund of a life assurance company.
The detailed rules, however, are complex, and companies need to study them closely to see whether the substantial shareholding exemption applies.
There is a wide range of exemptions, and usually groups arrange their affairs so a CFC charge does not arise.