|
|
 |
|
home |
Corporation Tax Q&A
|
Corporation Tax Q&A
New - FREE Tax Q&A Service!
If you're a site member and would like to submit a question, simply e-mail us via this link.
We'll publish our FREE response to your tax question(s) on the website within 2 working days.
|
|
Using offshore company, transfer of assets abroad and UK corporation tax - USERNAME: lhuggybear
Tax Question: 1) TRANSFER OF ASSET ABROAD RISK. I am setting up, or rather I am a partner in the setup of a management company in Luxembourg. There is no doubt possible about materiality there and so there is no need to analyse the business there. I am given 49% of the shares of that company. On setup, I subscribe to these shares through a Malta company set up for this purpose. Hence the shares have never been in my hands or in my name. Is there any risk the Revenue could see a transfer of asset abroad event here or anything similar. I am UK long term resident, non-domiciled. 2) CONTROL ISSUE IN MALTA COMPANY The sole purpose of above company is to hold the above mentioned shares and as such, there will be no other income than the dividends from Luxembourg. Whether I am a director or not, there is a risk the Revenue will consider that company to be managed and controlled from the UK, as I am the founder, sole shareholder and director of the company. I may have board meetings by myself in Turkey, but that may still not change the fact that it could be seen as managed from the UK, as I live here. Now, the dividend income stream into Malta, which is not taxable there, because of its intra-European 10%+ holding rule, would also not be taxable in the UK. Is there hence any concern for me to have? It is clear that I intend to bring back dividend into the UK, and pay tax on that, but also if the amounts are material, use the remittance mechanism to exempt part of my dividends. Thank you.... . . .
keep reading
|
Transferring UK business to offshore company USERNAME:Canigou
Tax Question: My wife and I currently live in the USA but have a UK company, trading worldwide, which pays us through a small salary plus dividends. We will shortly be moving back to France or the UK. I understand that I can reduce the company's taxes and overheads by basing it in, say, the Seychelles. But then would lose the benefit of being largely paid through dividends from a UK company. So is there a more tax-efficient way to be paid by an offshore company whilst being resident in the UK or France? . . .
keep reading
|
Tax deduction for warranty provision? USERNAME:neilstanley
Tax Question: We are a small engineering consultancy providing services mainly overseas. This is our first year of trading and we are approaching our year end. We want to minimise our corporation tax liability. Some of the contracts we have undertaken have warranty clauses which require us to 'make good' in the case where a fault is found. Are we able to take the liability related to these warranties into account when calculating Corporation Tax ? If so, how should we account for these liabilities and do we have to have any external audit to prove they are valid ? Thanks . . .
keep reading
|
Non resident moving to Malta and UK tax on LLP profits
Tax Question: I'm wondering what the best form of incorporation would be for the following business/situation. My wife is a Polish born citizen to Polish parents and has lived in the UK for the last 8 years. I am a dual UK/Irish Citizen and have lived in the Uk all of my life except for 2 years in Ireland about 10 years ago. We are about to start a new business, the business in question is currently VAT exempt so we won't need to register or worry about that side of things. We are planning to relocate to Malta in the next 2 years. My wife will relocate as a permanent resident, I expect to spend my time split between the UK and Malta but will involve me spending large blocks of time in the UK working with the business. Due to the highly regulated nature of the industry we will not be in a position to turnover companies. So my question is this. What type of incorporation will be the most tax efficient? If we set up an LLP with my wife as an equity member of say 90% would she be liable to UK tax? If we set up an LLP with an offshore company under my wifes control as the main equity member could we remove profits without taxation. To sum it up is there a way to run a UK business without taxation using my wifes future permanent residency status in Malta. If not which is the best way to go LLP or LTD. . . .
keep reading
|
£5,000 national insurance exemption for new businesses
Tax Question: What is the latest news on the £5k national insurance relief for new businesses and can you advise where the cut off point? I understood that they were aiming for a September launch but any new businesses launched from the budget date would still qualify retrospectively? Thanks . . .
keep reading
|
Charge more than market rent to company?
Tax Question: I am currently working out for my client the best way to incorporate and had originally suggested to keep the business property out of the business and charge a market value rent which would cover the mortgage payments. I know my client would miss out on Entrepreneurs Relief, but he has no intention to sell the property and I thought the tax advantages of taking a rent would outweigh any future ER. The only problem is that the market value rent has been calculated using the rateable value at only £13,000 a year, I had expected it to be in the region of £25,000 considering the value of the property. Would there be any problem in charging the Company a rent above the Market Value, say £20,000. Any comments would be appreciated. . . .
keep reading
|
Using UK company as a non resident
Tax Question: My wife and I are directors of a UK company. About 50 percent of the sales are in the UK and the rest from overseas. We are paid minimum salaries plus dividends. We have a house in France, where we are present, on average, 4 months out of the year. The rest of the time, we live in rented properties in other countries. We are wondering if we should be closing the UK company and opening an offshore equivalent so the company is no longer liable for tax on non-UK sales? Also, we are advised by our accountant that it would be advantageous, for tax reasons (eg. the yearly index-linked pension), to officially be resident in the UK (even though we aren't there more than 4 to 6 weeks out of the year) Can you advise? Best regards, . . .
keep reading
|
Reducing tax on profits of a trade association
Tax Question: We are looking at setting up a trade association and need some advice on the Tax and VAT implications. The association will have two parts: a) membership subscriptions and administration part which will be run along the lines of a not-for-profit organisation just aiming to cover its costs; and b) a more commercial part which will run paid-for conferences, training events, issue reports to members and non-members and this part will will aim to make a profit. What is the best way to structure this for tax and VAT? . . .
keep reading
|
Using offshore company for affiliate business
Tax Question: Hello, I'd like to set up an offshore company for my affiliate business to save tax. I'm a Hungarian national (non-domicile) and I have lived in the UK since 2006 (therefore I'm a UK resident). I still have a full-time job and I'd like to keep it until my affiliate business reaches the required level. Is it possible you think to avoid paying tax in the UK for my affiliate business by setting up an offshore company? My earnings from the affiliate business is generated in the US. Thanks . . .
keep reading
|
Extracting cash from UK company
Tax Question: I have a limited company which over the last 7 years has built up £212,000 in retained profit(small companies tax already paid) which is sitting in shareholders funds account earning interest of 0.10% (10th of 1%). I own 99% of the company. I also have £41,000 in my directors loan account. My personal tax situation is, i pay zero each year,pay myself a small amount (without tax and N.I)personal allowance, dividends around £37,000 with tax credit, income tax is zero. I don't have a pension or any other investments. I have a £170,000 mortgage (interest only) on my house, currently costing £162.00 per month. I will transfer the £212,000 of shareholder funds to to a higher paying interest bank deposit account or fix term bond (6 to 12 months) that will pay 2% to 2.5% interest, even after tax this should pay my mortgage payments until interest rates go up. When mortgage interest payments exceed the interest i am receiving, i was considering paying off my mortgage in a lump sum from shareholders funds, which i understand would incur a 22% tax bill. By the time i consider doing this in 12 to 18 months time i will have around 55,000 in my directors loan account, if i used this to pay off a lump of my mortgage this would leave £115,000 outstanding on my mortgage. Is there any way i could extract more from the £212,000 pot to pay off the rest of the mortgage without incurring a 22% tax bill? I guess not but it's worth asking? I guess if i want to pay the whole mortgage off at once it would set me back 22% tax, is that correct? I have very low outgoings because i am single with no family to support, therefore of the monies i am currently drawing in dividends i have about 15,000 to 20,000 each year left (not spent)being added to the directors loan account, that's the only other way i can see of paying off my mortgage tax free, is that correct? Is there anything i have missed? Other than the Conundrum of how to pay off my mortgage without paying tax, what other ways could i extract money from the shareholders funds? How much could i put into a pension, how much into tax free investments (or other vehicles)each tax year from the shareholders pot without paying tax? Finally can i extract funds to start a business overseas (Europe or elsewhere) and would i pay tax if the funds extracted where from my shareholders funds? . . .
keep reading
|
Tax and childcare voucher
Tax Question: Dear wealthreport i have a company from which i do not take any salary or dividends. the earnings are retained by the company. if i wanted to take advantage of the childcare voucher scheme, could i take a salary for the amount of the childcare voucher - as a salary sacrifice - and still not take any other salary or dividend? thanks kind regards . . .
keep reading
|
Stamp duty on residential proprty
Question: I am in the process of negotiating for the purchase of a property. The property is derelict with full planning permission for a new house. It is owned by a company and they are suggesting as part of the negotiating process that i take over the company which only has this property in it's portfolio. This will in turn negate the SDLT. The property/plot is valued at 2.5 million pounds hence 100k + saving. My intentions are to turn plot into our own private residence. My question to you- Is this a straight forward procedure and what might the pros and cons be as they will use this as a means to increase my offer price. . . .
keep reading
|
Section 419 Liability
Question: Section 419 Liability It will take me some time to get used to the new section number so please let me quote the old number. Question: Is it possible that once S419 liability has been paid ,One can leave the loan outstanding forever until it is decided to wind up the company . I understand that interest to the company on such a loan will be payable to avoid any benefit in kind but its the original loan amount I am concerned here.Can this loan be postponed for a long time. Thanks . . .
keep reading
|
Structure of purchase of company shareholding to reduce tax
Question: Sir, I own all the shares of my company. The called up share capital is £100. The market value of these shares would be £300,000 If I sold the shares, could you please advise all the taxes the buyer and I would have to pay. (CGT - Stamp duty etc) The company is a trading company and has been so for the past 20 years and owns offices. The buyer is a related party and this transaction would be at arms length. Should this be done now to avoid any proposed increase in CGT expected this week. If the buyer sold these shares in a couple of years at £350,000 or £400,000, carrying on the same trade, would I be correct to assume he would be taxed CGT on the difference at the rates applicable at the time. The buyer owns a company carrying on a similar trade. Would it be better if his company bought the share instead of him? or would it make no difference. Also if the buyer wanted to transfer all the trade of his company to this company which he has purchased so he can run only one company. Would this have any tax benefits or disadvantages? Thank you . . .
keep reading
|
Rollover/reinvestment relief and old goodwill
Tax Question: Thanks for the answer on Old Goodwill. You mentioned that there are new rules for rolling over gains. So can a gain arising in the the limited company on a goodwill disposal which is classed as old goodwill be rolled over ? if yes against acquisition of new goodwill or any other qualifying assets.? . . .
keep reading
|
Reimbursed expenses
I have a Uk Ltd company and the majority of my travel and subsistence expenses are reimbursed by my major client in Italy. What is the best way to show these reimbursements in order to avoid they add up to my total turnover and increase my tax? Thks . . .
keep reading
|
|
|
|
|
|
|
 |
|
 |
|
|
 |
Here's what our members are saying ...
"I joined the site after reading an offshore tax guide and was certainly not disappointed. The practical and 'to the point' tax planning has already saved me a considerable sum. I'd recommend this website to anyone."
Jerry Brown, Edinburgh
"I've saved £5,659 in CGT by using this site to double check my accountants advice. My wife has also identified further income tax savings of over £2,000 as result of the property tax articles.
In our case it's well worth the £10 membership fee."
Derek Bailey, Birmingham
I must thank you for the most informative reply to my enquiry.
It is so extensive, I intend setting an evening aside to absorb it all.
Again, thank you for a most useful website.
RB, UK
"Well written reports that are clear and insightful. I look forward to reading them every week!
Natasha Foude, France
"I have to say your web site is by far the best prepared and most informative that I have seen."
Elsa Budding, Newcastle
"I'm planning my emigration and the offshore reports are exactly what I'm looking for. I'll definitely be renewing!"
Sarah Mather, Reigate, Surrey.
"The property tax advice service was excellent, and I'd have no problems recommending it to anyone. I received my answer within 1 day and was very pleased with the response
Robert Saunders, Leicester
|
|
Offshore Tax Book
Non Dom Tax Book
Tax Havens Book
|
|
|
Benefits of Membership
