united-kingdom tax-law corporate-tax-laws investment
UK closed investment company for stocks
<p>I am going to set up a closed investment company mainly for stocks (and eventually property) investments. Now, let's say I will invest in stocks and I will not cash out in the first tax year period, am I right to say the profit is 0 so the tax is also 0? Only when the company will make profit (in this case selling the stocks hopefully grown) and then I have to pay taxes.</p>

<h2>A company pays tax on taxable profit</h2>
<p>That is, taxable revenue less tax deductible expenses. Not all revenue is taxable and not all expenses are tax deductible. Capital gains are also taxed differently from normal revenue.</p>
<p>If the company invests in stocks (by which I assume you mean shares in publicly traded companies and not herds of cattle or flocks of sheep), most of these will pay semi-annual dividends. These are taxable revenue and, subject to any deductions, you will owe tax on them.</p>

<p>Just to add to DaleM's answer: as well as deducting allowable expenses, <a href="https://www.gov.uk/tax-on-dividends" rel="nofollow noreferrer">dividends are taxed</a> as part of one's total income after taking in to account the relevant Personal Allowance and Dividend Allowance:</p>
<blockquote>
<p>You do not pay tax on any dividend income that falls within your Personal Allowance (the amount of income you can earn each year without paying tax). <a href="https://www.gov.uk/income-tax-rates" rel="nofollow noreferrer">[£12,570 for 2021/22]</a></p>
<p>You also get a dividend allowance each year. You only pay tax on any dividend income above the dividend allowance. [£2,000 for 2021/22]</p>
</blockquote>
