FK Corporate Income Tax

General reference only. This Guide is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for any specific person's facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.

Who this applies to

A company incorporated here or centrally managed and controlled here is ordinarily resident and taxable on worldwide income, subject to exemptions. Non-resident companies are taxable on relevant Falkland business income under §34. For a qualifying UK resident company, the UK arrangement normally limits business-profits taxation to a Falkland permanent establishment. Do not assume every other foreign company receives that treaty protection. §§2, 23-25, 34; FIGTO §§2-3.

Quick reference: identify residence, local activity, accounting period, worldwide associated companies and ring-fence income before selecting the tax bands. Pay and file have different clocks.

Rates, bands and thresholds

Item	Rule for 2026	Official source
Ordinary lower rate	21% on chargeable ordinary income up to the adjusted threshold	§28(1)-(3)
Ordinary upper rate	26% on the excess	§28(1)(ii)
Full-year threshold	GBP 500,000 divided by 1 + number of associated companies; reduce proportionately for a period shorter than twelve months	§28(2), (6)-(7)
Ring-fence income	26%; excluded from the ordinary lower-rate band	§28(3), FIGTO company page

Count worldwide associates. Control by the same person or persons, or one company's control of the other, is relevant; a company carrying on no business during the relevant period of association is disregarded. Do not divide by the number of associates alone: the denominator includes the taxpayer. §28(6).

The base

Reconcile accounting profit to tax: include taxable income, remove statutory exemptions, add back private, non-business and capital expenditure and accounting depreciation, then deduct eligible statutory allowances. Expenses must be incurred in the relevant period wholly and exclusively for business and not be capital. For non-residents isolate direct local contract income and expenses; a fair, reasonable, consistent allocation may be needed for indirect head-office costs. §§24-25, 57-59, 97-119; FIGTO §§8-9.

Ordinary capital allowances

Keep a tax asset schedule separate from accounting depreciation. For qualifying renewable-energy technology, plant, machinery and vehicles (including aircraft), §117 pools cumulative qualifying acquisition/construction/enhancement expenditure A less prior allowances B and relevant disposal values C. For a positive pool above GBP 1,000, the writing-down allowance is 40%, proportionately adjusted for period length or business carried on for only part of it. A positive pool of GBP 1,000 or less is written down to zero. On permanent cessation deduct the full positive balance; unabsorbed cessation allowance may be carried back to the three immediately preceding periods, latest first. If C exceeds A-B, the excess is a balancing charge. Scientific-research/ring-fence expenditure excluded by §116(2) uses its own rules. §§116-117.

Apportion non-business use under §116(4). Qualifying capital assets costing no more than GBP 500 per individual asset may be expensed under §97A(1)(eb), with no second capital allowance under §105(7). A full-year qualifying pool of GBP 10,000, no disposals/private use, yields GBP 4,000 allowance and GBP 6,000 carry-forward; the rate is not accounting straight-line depreciation. §§97A, 105, 116-117.

Buildings use expenditure-based annual allowances under §116(9): 10% for buildings outside Camp and farmhouses, 25% for other Camp buildings. No allowance for residential letting outside the Islands. For residential accommodation, owner/connected-person or major-shareholder occupation and transfer of the original owner's title normally exclude relief under §116(10). The Commissioner's principally-agricultural occupation exception can disapply the first two restrictions and non-business apportionment (§116(11)); the ownership-transfer exception needs both a new agricultural-business owner and principally agricultural occupation (§116(12)). Mixed-use buildings require just-and-equitable expenditure apportionment by part, except farmhouses under §116(13A). Disposals follow §119 balancing allowances/charges, limited to qualifying expenditure. Ships, roads, scientific research, petroleum and temporarily imported plant (§124A) need their specific categories; do not apply the plant pool to them. §§116(9)-(13A), 119.

Commercial losses need a claim, cannot be used twice and must be shown on the CT return with where/how used. §128 permits current-period or immediately preceding-period relief, with that claim within two years after the loss period. Carry-forward requires a claim within six years, continuation of the business and the statutory ordering. Check §129 ownership/business-change restrictions. Eligible group surrender needs separate group-relief claims and consents under §§131-139. §§125, 128-139. The CT form introduced for submissions from January 2026 includes loss and group-relief fields. FIGTO.

Deadlines and filing

1. Establish the accounting period under §26: it ends at the earliest relevant statutory event, including expiry of twelve months, the accounts date, cessation or residence/charge change. The accounts' period of account can differ.
2. Obtain the current Corporation Tax Return, CTR FIGTO 12/25, required for submissions from January 2026. Page 1 asks for Company name, Company Reference Number (CRN), registered office/business addresses and accounting-period From/To. Page 2 Summary of Return separates chargeable and Ring Fence profits/losses, loss carried back, brought forward and unused loss to carry forward. Enter profits chargeable at 21%/26%, total CT payable, CT date/amount paid and balance due. Enter the number of associated companies worldwide, expressly nil if none, and list them/country of incorporation: the form warns blank association information leads to all profits at 26%. Group-relief claims belong in the computation; surrender needs the separate Group Relief Surrender consent form. Tick enclosures, attach signed statutory accounts, computation and asset schedule (and local income/expense statement for non-residents). Sign/date the page 1 completeness declaration, with name and capacity. These are field labels, not invented box numbers.
3. Pay without demand on the day after eight months expire from the end of the accounting period, even if no assessment was issued (§27).
4. Deliver the return and accounts within nine months after the end of the period of account (§30), unless FIGTO grants an extension. Its pay-and-file guide allows email to general@taxation.gov.fk, followed by the original signed return by post/hand. Preserve submission evidence, reference and payment reconciliation. Keep accounting records at least six years after the chargeable period, longer if directed under §192A.

For a year/period of account ending 31 December 2026, the ordinary dates are payment 1 September 2027 and filing 30 September 2027. Cessation can accelerate payment before the annual accounts filing date. §§26-30; FIGTO pay-and-file guide.

Penalties and interest

Under §33, late tax bears interest at three percentage points over base lending rate. Return/accounts delivered up to three months late incur GBP 100; more than three months late GBP 200. For a third consecutive late period these fixed penalties become GBP 500 and GBP 1,000. More than six months late also attracts 10% of the tax still unpaid six months after filing due time, increasing to 20% if over twelve months late. Interest remains separate. §33(1)-(4). Do not apply a percentage penalty to all tax where it was already paid before that statutory measurement date.

The underdeclaration, wilful-evasion and records sanctions in §§188-192A also apply; see fk-income-tax, penalties for their quantified bases and conditions.

Cross-border points

Screen connected transactions through fk-transfer-pricing. Foreign-tax-credit claims, interest withholding and the separate oil-contract withholding regime are handled in fk-cross-border-tax. A defence-related employer exemption for employees does not automatically exempt a company's profits. FIGTO §§14-15.

Two worked examples that recompute

Ordinary full year, no associates. Assume adjusted profits GBP 600,000 and no ring-fence income, credits or losses. GBP 500,000 at 21% is GBP 105,000 and the balance at 26% is GBP 26,000, total GBP 131,000.

name: Ordinary corporation tax
inputs:
  profit: 600000
steps:
  threshold: 500000
  lower: min(profit,threshold)*0.21
  upper: max(0,profit-threshold)*0.26
  tax: lower+upper
expected:
  tax: 131000

Associated-company decision. Assumed full-year profits GBP 300,000 cost GBP 63,000 with no associates. With one trading worldwide associate under §28(6), the threshold halves to GBP 250,000 and tax becomes GBP 65,500, GBP 2,500 more. A dormant company meeting the statutory no-business exclusion is not counted. A new entity needs commercial analysis, not an assumption that incorporating creates another full lower-rate band.

name: Associate changes threshold
inputs:
  profit: 300000
  associates: 1
steps:
  standalone_tax: min(profit,500000)*0.21+max(0,profit-500000)*0.26
  threshold: 500000/(1+associates)
  associated_tax: min(profit,threshold)*0.21+max(0,profit-threshold)*0.26
  increase: associated_tax-standalone_tax
expected:
  threshold: 250000
  standalone_tax: 63000
  associated_tax: 65500
  increase: 2500

Ask the client first

• Incorporation, management location, UK treaty residence and local activity.
• Accounting period, accounts date, entry/cessation and any approved changes.
• Worldwide ownership/control map and whether each associate trades.
• Accounts, tax adjustments, capital assets and related-party charges.
• Loss history, previous use, group consents and ownership changes.
• Ring-fence activities, foreign income, foreign tax and payments overseas.

Sources

Source and text actually read	URL	Read on
Taxes Ordinance, June 2026 consolidation; §§2, 23-34A, 97-97A, 105, 116-119, 125, 128-139, 188-192A and 201 and linked allowance boundaries. §28: “where A is the number of associated companies”; §27: “day following the expiry of eight months”	https://legislation.gov.fk/download/pdf/05a29220-06c3-4560-867c-99d6c5200d0d/15f327cc-37ae-4304-a080-e3d54a80bd43/fiord-1997-14_2026-06-12.pdf	2026-11-11
FIGTO corporation guide, all five pages, including losses and withholding boundaries. “incurred wholly and exclusively for the purposes of the business”	https://www.gov.fk/taxation/wp-content/uploads/sites/25/2026/02/CT-guide0.pdf	2026-11-11
FIGTO pay-and-file guide, both pages; “within nine months of the end of that period of account”	https://www.gov.fk/taxation/wp-content/uploads/sites/25/2026/02/CT-pay-file.pdf	2026-11-11
FIGTO home page, updated return announcement	https://www.gov.fk/taxation/	2026-11-11
Current CT return, read for both pages, identity, profits, loss and association fields, declaration and enclosures; “Please enter nil if there are no associated companies”	https://www.gov.fk/taxation/wp-content/uploads/sites/25/2026/02/Corporation-Tax-Return.pdf	2026-11-11

Not yet confirmed: live base lending rate and full specialist petroleum loss/finance-charge/asset computations. No invented current rate or UK allowance is used.