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Corporation Tax Q&A
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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.
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Incorporation Overseas
Question: I own 91% of UK company, that has traded for 23 years in UK. I am considering moving overseas, probably Cyprus. Can i re-incorporate the UK Co. in Cyprus, and take dividends overseas whilst resident in Cyprus. . . .
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Corporate partner within an LLP
Question: We are members of an LLP. We have purchased goodwill using bank finance. We have reallised that we are paying 40%/50% tax on profits we are retaining to pay the capital back. Can we introduce a corporate partner transfer the goodwill from the LLp to the limited company, leaving a blance due from the limited company to the LLP. The corporate partner would have a share of profits, we wouldn't have to transfer funds as there is a loan account between the two entities so there are no overdrawn laon account issues. Can you see any problems with this? . . .
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Cash losses on theft by employee
Question: Is there any tax restriction arising out of cash stolen from a business. Employee managed to steal just under £3,000 and wanted to understand if this is an allowable deduction. . . .
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Use of offshore company
Question: I am an Dutch national, currently domiciled in the UK but am planning to leave the UK for good in about 5 years time. I will soon be starting a consulting contract with an EU company (outside the UK) for whom I will be working in the EU (not UK) for 3 days a week and the other 2 days either in the UK or visiting group companies around the world. I intend to invoice this company for my services from an off-shore company based in a zero-rate corporation tax location, but NOT transfer any of that money to the UK in the 5 years that I will still be domiciled in the UK (or use it in any other way). If I leave 100% of the funds in the off-shore company for 5 years (and can prove that in case of an audit), will any of that be liable for tax in the UK? I will be able to use non-UK directors for my company if required. Are there any problems you can think of? Any advise you can give me in this respect? Thank you. . . .
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Corporation tax for offshore company
Question: I am a non UK resident. My Non-UK /offshore company deals in buying cheap surplus stocks. My business is run solely from outside the UK Via the internet / fAx and email. I hardly spend more than a few weeks in the UK every year. I plan to buy a few surplus lots from the UK and EEC and stocking them in the UK for resale. I am trying to find the most easy and suitable way from the 2 options below. OPTION 1 I can use a distribution company to store and dispatch the goods when I get orders. Problems with this options are: 1) I will have to file long VAT and EEC returns as a non established unit which I am not very familiar with. 2) The distribution company has the possibility for making costly stock-picking mistakes by shipping the wrong part numbers out. 3) Customers prefer buying from a UK company. Alternately, I can sell all my stocks thru a UK trading company which knows the trade. There will be no contract with this UK company except an understanding that they will be offered a list of items at a particular price and they will have full access to the stocks. Surely the UK company will have to pay the usual UK taxes. As far as my company is concerned what steps should I take to ensure that I am not caught within the UK taxation laws. Would this UK company be classified as my agent. Do I have any better options. Thank you . . .
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Paper work for giving a loan to my company
Question: Dear sirs I bought a property to develop from the auction. I have just set up a new limited company to register this company with. I have applied for a bank account in the name of the new company which is progressing, but very slowly. My intention is to give a loan to the company from my own savings, and for the company to then use this loan to buy the property (I've already had to write a check from my own bank account at the auction to pay for the 10% deposit, because the company didn't exist then). I was going to literately transfer the money (remaining 90% of the purchase price) from my savings bank account to the new company bank account, and then from this to the solicitor to do the completion. However, the bank account might not be ready in a week's time when the completion is due. Can I transfer the money directly from my own personal savings account to the solicitor, and do a piece of paper (e.g., with the solicitor/accountant), to state that this is actually a loan from me to my company without interest? If this is possible, could you please give me some guidance on what I exactly need to do in terms of paper work to avoid problems in the future: 1) Do I need to get a solicitor or accountant involved? 2) Do I need to have witnesses when I sign it 3) Who needs to sign it? 4) What does the paper it need to say? how do I make it official? Finally, is there anything I need to do about the deposit I paid, so that it is also treated as a loan from myself to the company? Many thanks in advance for your help . . .
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Offshore/Belize company - various tax questions
Questions: What defines the domicile of e-commerce business registered in offshore? Non-doms, UK resident for less then 8 tax years established an offshore Belize company(e-commerce) with the website hosted by server in Belize. He is the shareholder and the director of IBC in Belize. How is it taxed? Can offshore company REGISTER an initial copyright for an audiobook? Or it should be done by the individual who produced the audiobook in the first place? Can offshore company REGISTER an initial copyright for its trademark? Belize IBC internet company established trading account with an Austrian bank. All the initial transactions from the website's customers are done through the Austrian bank account. Belize IBC hired a virtual office in Austria. How is it taxed? An offshore company hires a UK resident to provide services (or as an employee). How is it taxed? . . .
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Follow up to ques: Property development tax advice
Question: Dear Sirs Thank you very much for your prompt and almost immediate and informative reply to my question entitled "Property development tax advice" earlier today, regarding buying a land, developing it into houses and selling them in the most tax efficient way. I really value your very clear and informative answers. Following from my question, I have the following queries which I would be grateful to get help with: 1) Is there anyway of being taxed on the profits as capital gain? and is there an advantage in that? I know CGT is 18% for individuals together with £10,100 allowance for 2009-10, but what is it for a limited company and are there any allowances? 2) If I set up a limited company, how should I extract profits? are dividends the best way since I will be shareholder of the company (I assume when you mentioned "If you did extract cash there would be a tax charge at 25% on amounts above the £40K higher rate band... " was referring to extracting the profits through means other than dividends? 2a) On a side, quick question related to question 2, can I set up a limited company as the sole director and sole shareholder or do I need to include someone else? 3) If I set up a limited company, and I decide to retain the profits for another investment, does rollover apply here, where I can quickly buy another investment with the profits to avoid being taxed on the profits before the end of the tax year (this is my understanding of rollover, please correct me if I am wrong)? 4) Why would I be classed as property trader rather than property developer? and does this make a difference in my case of buying a land, building houses and selling them? Many many thanks for your replies once again! . . .
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Property development tax advice
Question: Dear Sirs I am considering buying a land that I am hoping to develop into 10+ houses. I hope to make a profit of somewhere between £100k and £400k by the end of this project (which will take more than a year or two to complete). My question is what is the best structure to buy this property under in terms of tax that will make most money? shall I carry out this entire project under my name directly, or under a new limited company, or under a limited company owned by another limited company or under an offshore company (I am UK resident domiciled)? My plan is simply to develop it and sell the houses. Kind regards . . .
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EU or Limited Company?
Question: An offer may arise from a independent UK based consultancy (not an agency) to perform a IT consultancy contract at one of it's client company's site for 3 months possibly extending to 6 months. If offered and undertaken, the consultant's status would become UK resident but not ordinarily UK resident. Would there be any benefit in the consultant operating via a EU based company over a UK based company? The EU based company is managed by non-domiciled/non-UK resident partners. If minimal impact then would prefer the least bureaucratic option. . . .
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Capital gain on gold bullion in a small UK company
Question: With interest rates on cash savings negligible I have been investing my company's cash in shares and gold bullion. Am I correct in my assumption that any gains made on the sale of these investments are taxable at the small company's rate of 21% as for any other income earned by the company? Many thanks . . .
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Uk Offshore Tax
Question: Hello, I am not an UK citizen and I am not currently living in the UK. My wife and I are planning to permanently move to the UK very soon. I run an internet based company which was incorporated in Belize. The company revenue comes from electronically delivered advertising services(basically affiliate marketing services delivered for another company). The company generates around 150000 in profits per year. I understand that once I move to the UK the company becomes resident there and so I will have to pay tax on the profits it generated, which as I understand would be around 40% in my case. What can I do in order to reduce the tax for my company? Thank you very much! . . .
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Property rental losses and tax relief
Question: If there are losses carried forward arising out of a property rental scenario and the ownership for the property is moved to a ltd company, can the company utilise those losses and set against current year corporation tax profits? That said, any CGT issues would presumably be better served in personal tax environment when compared to that of a ltd company? Thanks . . .
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Offshore company
Question: I am UK domiciled, but I am non-resident. I'd like to transfer my UK property into an offshore company for tax planning reasons. Do I have transfer the legal title, or can I just transfer the beneficial ownership using a Deed of Trust? If I just transfer the beneficial ownership, do I have to inform HMRC of the new owner? And who will be liable for the UK tax on any rental income - me or the offshore company? . . .
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Rental income - company/schedule A or personal?
Question: My client runs two service companies from an office, but sublets the office to a number of tenants. Are there any considerations for property rental in the context of a ltd company that would deliver a tax advantage? To what extent is schedule A different in a corporation tax situation compared to income tax. . . .
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Minimising corporation tax
Question: I am one of 5 directors of a uk limited online marketing company which generates revenue worldwide and has 16 uk based employees. We are currently looking at moving most/all of the employees roles to india. 4 of the directors would cease day to day involvement in the business and 1 director (originally from ghana) would possibly move back to ghana and manage the business from there. If we set up a holding company in the isle of man or similar and paid this company a fee/service charge equivalent to a chunk of our profits could we dramatically reduce the amount of corporation tax we pay in the uk? currently this is circa £100-150k pa. Would the directors as individuals pay more tax if these corporation tax savings were distributed out to the directors? Overall would there be a net benefit of moving the company? If the company continued to be managed from the uk, would the position be different? . . .
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Offshore Tax Book
Non Dom Tax Book
Tax Havens Book
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Capital Gains Tax
