This is our most popular package with UK residents, and includes: -
The registration of your company from scratch using your own registered office address, and appoint your own candidates to the roles of director, secretary (if needed), and shareholder;
The standard capital on formation is £1.00, this is divided into 1.00 ordinary share valued at £1.00 (a minimum of one share must be issued);
The formation of a limited company usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for incorporation is included in the price of this package;
The following documents, which need to be printed and signed, will be emailed to you upon formation of your company: -
A certificate of incorporation (requires PDF file reader);
The memorandum & articles of association (requires MS-Word file reader);
The first meeting of the board of directors (requires MS-Word file reader);
Share certificates and a company register (requires MS-Word file reader).
Economy Package
£ 82.00
Annual Maintenance Fee £50.00
This is our most popular package with UK and EU residents, and includes: -
The registration your company from scratch using one of our registered office addresses, and appoint your own candidates to the roles of director, secretary (if needed), and shareholder;
The standard capital on formation is £1.00, this is divided into 1.00 ordinary share valued at £1.00 (a minimum of one share must be issued);
The formation of a limited company usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for incorporation is included in the price of this package;
The provision of a registered office address for 12 months is also included in the price of this package (our registered office address service is charged annually);
The following documents, which need to be printed and signed, will be emailed to you upon formation of your company: -
A certificate of incorporation (requires PDF file reader);
The memorandum & articles of association (requires MS-Word file reader);
The first meeting of the board of directors (requires MS-Word file reader);
Share certificates and a company register (requires MS-Word file reader).
Premier Package
£ 207.00
Annual Maintenance Fee £175.00
This is another one very popular package for small and medium size businesses, such as those being run by a sole director from home, and for companies owned by overseas residents who still need a local registered office address but would rather not open local offices;
This package is often chosen by such customers, who are looking to minimise a sole director personal liability (and who are not quite familiar with the new UK corporate legislation), because this package includes a provision of a nominee secretary for 12 months. This package is also includes: -
The registration your company from scratch using one of our registered office addresses, and appoint your own candidates to the roles of director, and shareholder;
The standard capital on formation is £1.00, this is divided into 1.00 ordinary share valued at £1.00 (a minimum of one share must be issued);
The formation of a limited company usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for incorporation is included in the price of this package;
The provision of a registered office address for 12 months is included in the price of this package (our registered office address service is charged annually);
The provision of a nominee secretary for 12 months is also included in the price of this package (our nominee secretary service is charged annually);
The following hard bound copy of corporate documents, will be posted to you upon formation of your company: -
A laminated copy of the certificate of incorporation of your company;
A hard bound copy of the memorandum and articles of association;
A hard bound copy of the minutes of the first meeting of directors;
Share certificates, and your company register.
Deluxe Package
£ 557.00
Annual Maintenance Fee £525.00
The Deluxe limited company package is a fast and easy option, it is ideal for the UK, EU, and international small to medium businesses who wish to appoint a nominee director and a nominee secretary in order to maintain anonymity, and it includes: -
Incorporation of your company from scratch using one of our registered office addresses in London, our nominee director and nominee secretary. We can appoint your own candidate(s) to the role of shareholder(s), or you can appoint a nominee sharholder provided by Coddan;
The standard capital on formation is £1.00, this is divided into 1.00 ordinary share valued at £1.00 (a minimum of one share must be issued);
The formation of a limited company usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for incorporation is included in the price of this package;
The provision of a registered office address for 12 months is included in the price of this package (our registered office address service is charged annually);
The provision of a nominee secretary for 12 months is included in the price of this package (our nominee secretary service is charged annually);
The provision of a nominee director for 12 months is also included in the price of this package (our nominee director service is charged annually);
The following two hard bound copies of corporate documents, will be posted to you upon formation of your company: -
A laminated copy of the certificate of incorporation of your company;
A hard bound copy of the memorandum and articles of association;
A hard bound copy of the minutes of the first meeting of directors;
Share certificates, and your company register;
The general power of attorney signed by a nominee director;
Pre-signed, undated resignation letter from a nominee director;
The agreement for the provision of nominee service and indemnification of nominee.
Legal Requirements to Register an LTD
A private company limited by shares in England and Wales must have at least one director, one shareholder, and may have a secretary.
You need at least one person to form this type of company. If there is only one director, and that director is a natural person in your company, that director can also act as the secretary.
A company must have at least one director who is a natural person. This requirement is met if the office of director is held by a natural person as a corporation sole or otherwise by virtue of an office.
You can register a sole director' company, if you are familiar with the secretaries duties and responsibilities, because all of them belongs to a sole director.
The directors and secretary of your company can also be shareholders.
The Companies Act imposes no restriction on the minimum age of company directors. However Companies House will actively discourage the appointment of anyone under the age of 16 from taking up a company directorship on the grounds that the individuals concerned may not fully understand the legal liabilities that go with the position and for the most part will not have the experience necessary to perform the duties of a company director.
Under the Companies Act 2006, there is no restriction on any or all of the members/shareholders being from an overseas country (i.e. outside the United Kingdom in terms of residency, domicile, citizenship, place of incorporation or all or any of those concepts).
There is no requirement for the officers of your company to be UK citizens or residents, nor for them to hold valid work permits.
Owning, or being an officer of a UK company does not, however, grant you any right to live or work in the UK if you are a foreign national.
Your company must have a registered office address within England or Wales; this is the official address of your company and will be on the public record as such.
Your company must hold its official company documents at its registered office address: its register of shareholders, and its constitutional documents.
So long as you maintain a registered office address in England or Wales, you can conduct your business from any place in the world: you do not have to run your business from your registered office address.
COMPANY INCORPORATION SERVICE FOR NON-UK RESIDENTS AND NON-BRITISH NATIONALS. COMPANY FORMATION IN THE UNITED KINGDOM
For decades, the legal, financial, and entrepreneurial communities have turned to Coddan for their incorporating needs. We provide reliable nationwide service. We register companies in London, Birmingham, Glasgow, Edinburgh, Belfast and Dublin, form corporations and LLCs in all 50 states plus District of Columbia. For just £32.00 we provide you with a complete UK company formation package, ready to begin trading usually in under three hours. Our prices include all Companies House fees and required documentation.
Coddan aims to provide all of our clients with the most efficient and convenient services possible. Electronic filing is currently administered for new UK company formations, and Coddan CPM Limited is one of a few select companies that is authorised to present new company documents directly to the UK Companies House, enabling the full incorporation of each company without the need to submit any paper forms.
Since Coddan is always searching for new ways to improve our service to customers, we are proud to announce that we now have a similar e-filing method for new companies in the Republic of Ireland, which will allow us to reduce the period of time it takes to incorporate new Irish entities by 50%. The Companies Registration Office (CRO) in Ireland recognises our company as one of the few providers of the CRODisk scheme, which was originally developed by the CRO with the purpose of minimising incorporation time and creating a more cost-effective option for registering a company.
Operating as a limited company often gives suppliers and customers a sense of confidence in a business. Quite often, larger organisations in particular will prefer not to deal with non-limited businesses. The formation of a limited company is one simple and low cost method to protect a business name. Whilst this does not in itself give any rights to use of the business name, many clients incorporate companies in anticipation of future development of new businesses or in order to protect the limited company name of an existing non-limited business for the future.
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We are prepared and committed to serving our entrepreneurial-spirited clients quickly, professionally, and at the best rates available from any service company in the industry. We provide a wide range of corporate services including: formation of companies and limited liability partnerships, Internet domain name registration, registered office address service and other small business services such as:
Change of Name with revised Mem & Arts if original copy supplied to us - £65.00 Change of Main Objects / Alteration to Articles from your resolutions - £75.00 Increase, Decrease, Sub-Division or Consolidation of Share Capital - £75.00 Creation of Preference Shares - £220.00 Purchase of Own Shares (exc. Stamp Duty 0.5%): financed from Distributable Reserves - £240.00 Purchase of Own Shares (exc. Stamp Duty 0.5%): financed from Capital - £159.95 Creation & Issue of Bearer Warrants - £159.95 Public to Private or Private to Public - £240.00
Coddan has everything you need to incorporate your business to get your company off to a great start. When you incorporate on-line with Coddan, you save valuable time and money. Count on us to point your business in the right direction. Incorporate today! Questions about our company or our service? Please E-Mail or call us: 033 0808-0089 or +44 (0) 207.935.5171, fax: +44 207.504.3531.
If you're thinking about starting a new life abroad and forming a company to start your own small or home based business this article with provide you with some tips to set you on the right track to small business start-up success. There are a number of different ways in which an overseas company may set up a business presence in the UK. Depending on your business model, you may choose to acquire or merge with an existing UK business, register a limited company to create either a subsidiary or a joint venture vehicle, create a place of business or branch office, or use some other structure such as a partnership. How to Become a Private Company:Click Here for More Details
Company Formations Requirements: Generally speaking, there are no restrictions on foreign ownership or control of a UK company or other business. However, there are a number of regulations and requirements which potentially impact the acquisition of a business. For example, the acquisition of a company whose shares are quoted will require compliance with the relevant regulations and codes on mergers and takeovers. Mergers and acquisitions which may have the effect of restricting competition will be subject to the various controls imposed by UK and European Union competition law. In all cases, the merger or acquisition will require detailed legal documentation.
If you live overseas, you must decide whether your British, Scottish or Irish company will trade it its own right (and pay tax in the United Kingdom) or if you will trade through a branch of the company registered in your country of residence. If you decide to open a local branch, you are likely to need special documents to satisfy the authorities that your company has a valid, current registration. In most cases, a registration authority will require a Good Standing Certificate showing your name as Director and Apostille to confirm the certificate's legal validity.
All UK registered companies are legally required to have a UK registered office address. It is the address of a company to which Companies House letters and reminders will be sent. The registered office address can be anywhere in England and Wales (or Scotland if your company is registered there). The registered office address must always be an effective address for delivering documents to the company, and to avoid delays it is important that all correspondence sent to this address is dealt with promptly. For UK companies owned by overseas residents it is a legal requirement to have a UK registered address where official government mail can sent.
Economy Overseas Package for Non-UK Residents - £82.00. All Inclusive Company Registration. Each limited company package includes all statutory paperwork and is fully compliant with company law. All our private UK companies are general trading companies and can be used to conduct any type of business. A Certificate of Incorporation, and the Memorandum and Articles of Association of your company will be sent to you upon formation of your company. Provision of a registered office address for 12 months. You can appoint your own directors and secretary BEFORE company incorporation. This is absolutely FREE. Our 4-8 hour online incorporation service enables you to register your company quickly and effortlessly. All government and filing fees are included in the cost of our E-Quick pack. All certificates and documents will be sent directly to you via email immediately following the formation of your company. It will take just 5 minutes to complete the online registration form, then your company could be up and running within 4-8 working hours.
THE ECONOMY PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. Company Pliers Seal - £20.00. 2. Laminated Hard-copy of the Certificate of Incorporation - £5.95. 3. Laminated Hard-copy of the Certificate of Incorporation, Bound Copies of the Memorandum & Articles, and Combined Company Register - £12.95. 4. Domain Name Registration for two years - £16.00. 5. Provision of a Nominee Company Secretary for 12 months - £49.95. 6. Certificate of Good Standing - £35.00. 7. Notarisation & Apostille of Documents.
We are able to offer registered office address facilities. Facilities are offered for 12 monthly periods. There is no refund of monies paid. The registered office address facility includes the forwarding of official post i.e. correspondence from HM Inspector of Taxes, Companies House etc. We will not forward other correspondence unless Full Post forwarding has been selected.
The registered office address facility provides for the forwarding of mail from Companies House and Inland Revenue but we are able to offer a full mail forwarding service. We will forward your mail to any address in the UK (or elsewhere), either at intervals you require or when it is received. You can also change your forwarding address as often as you like. This facility can be used on annual basis. We will use first class post in the UK and airmail elsewhere unless we are instructed differently. Compare Prices of Various Forms of Companies:OK, Let Me Check Your Packages & Costs
These documents can be ordered when you form your company or at a later date. However, it is not wise to order the Good Standing Certificate until your name has been registered at Companies House as a Director of your company. Some authorities may also require a translation of the company's Memorandum & Articles. If, however, they also require this document to be Apostilled, it will be necessary to have it legalised before applying for Apostille. Check the requirements with the authorities in the area where you live.
Post Incorporation Services: Normally the formation or acquisition of a limited company at the beginning is a very quick and informal process. Of course the company will require professional advice and professional services during its development. Our consultants can help you to start-up your business and support it in many ways during its development. As ancillary services to the formation of UK companies, we can offer you the following services:
Nominee Directors from - £125.00 Nominee Company Secretaries from - £49.95 Nominee Shareholders from - £100.00 Registered Office from - £50.00 Maintenance of Statutory Registers and Filing of Annual Returns Preparation of Special Resolutions from £50.00 Bank Introductions from - £250.00 Day-to-day Administration Telephone Answering Post Office Box Computerised Book-keeping and Production of Periodic Financial Statements Assistance with International Audit Requirements Completion and Filing of Annual Returns from - £90.00 General Power of Attorney Notarial and Apostille Services from £70.00 International Reinvoicing Services
When it comes to company formations, our service is both simple and quick to use. For just £32.00 we provide you with a complete company formation package, ready to begin trading usually in under three hours. The above package includes the estimated timescale for preparation of your documents. Your new limited liability company will usually be formed within 3-8 working hours from receipt of payment. If your package includes an apostille certificate this will usually add approximately 10 working days to the completion date.
With our new online electronic companies set-up system, we take you through each step of your private or guarantee (non-for profit) company formation process as quickly and as simply as possible. By providing 100% of the details online using a simple, well laid out process, you don't have to get tied up with complicated forms. After submitting, just sit back and wait for our email notification. You will be registered as the founding director and shareholder of the company, this means that you can open your doors for equity or debt financing from other sources since the company is actually registered in a real persons name who is responsible for the operations of the company.
We appreciate that not everyone likes to place orders over the Internet, preferring to place orders by phone, fax or even post. We are happy to take orders through any of these methods, but prefer to have the order in writing to avoid any possibility of error. This form can be completed on your computer (on screen) and then saved and e-mailed to us. To Download This Offline Order Form Simply: Click Here (Our printable order form is in Excel format. To download, click the right mouse button and "Save target as")
If you are seeking company registration services you may wish to enquire whether your proposed British company formation agent or English company formation system will be transferring an existing registered company (i.e. a shelf company) to you or forming a brand new company for you. If an existing company is being transferred to you, you will need to trust the company formation agent or other provider that the company hasn't traded before. We have many Shelf and Aged Companies (off-the-shelf), which are ready to trade, and can be transferred to you within hours. Do You Need to Buy a Company Now? Currently Available Shelf Companies
Live Help: Live Help is a real time "chat" feature which enables you to interact with a customer service representative without a phone call. Get answers to your questions while using our website. Clicking the "Live Help" button will start an on-line session with one of our representatives. Live Help is currently available during normal business hours. Outside of the above opening hours, our business center will be closed. When you click on the button, you will see an e-mail form that will allow you to send us a mail with your questions. Live Help is free! There are no hidden fees. We offer the service as a courtesy to our website visitors.
Dear visitors, while having a chat session with a customer, we are frequently requested to give a piece of advice on tax planning or business structuring. We would like to inform you that it is against our principles to provide online advice pertaining to these issues. The points that may be covered during a session include service description, package or service price, navigation at our website, ways of making an order, methods of payment etc. Yet, if you wish us to provide you with advice on tax or business structuring, you should be aware that this service is chargeable.
UK COMPANY REGISTRATION. TYPES OF BUSINESS PRESENCE:
For almost all business purposes the form used is the company limited by shares, either as a private limited company (LTD) or as a public limited company (PLC). Most foreign companies set up a private limited company. No consents are needed, no local shareholders or directors are required and no minimum capital rules apply. Certain documents (e.g. Memorandum and Articles of Association) must be filed with Companies House in order to incorporate the company.
Can I Have a Registered Office Address Outside the United Kingdom? NO. You may have offices outside the UK, but the registered office for any company must be in the United Kingdom. This is a legal and administrative requirement. A correct copy of some documents must also, by law, remain at the registered office address.
What is a Registered Office?
General Advantages of UK Private Limited Companies:
1. Liability is, in the vast majority of cases, strictly limited to the investments made by the shareholders. 2. Company Officers are not personally liable for their actions unless there is a clear and serious breach of their fiduciary duty. 3. Limited companies often benefit from greater prestige than their sole proprietorship or partnership counterparts. The reason is because such an enterprise normally requires more planning and thus is deemed more credible. 4. Limited companies often benefit from significant tax advantages. In fact, many countries around the world give exclusive tax incentives to this type of entity. 5. The rights of shareholders are normally clearly defined and protected. 6. Corporate taxes only become payable after the end of the financial year. This means money that would otherwise be taxed on a monthly or quarterly basis, is available to earn further interest before the final payment of tax. 7. You need only appoint one Director and one Shareholder. 8. Directors can be corporate bodies or private individuals. 9. A Director can be of any nationality. 10. All companies must appoint a company Secretary who can be of any nationality.
For the purposes of the official lodgement of papers (matters concerning the corporate entity, legal actions, notices, etc.) and to comply with the principle that people have a right to know with whom they are dealing, every company must have United Kingdom registered office. The address must be registered with Companies House under the Companies Act 1985 and 1989, and it is a requirement of every limited company.
The registered office can only be within the country in which the company is incorporated although there are EU proposals that would allow a company to move its registered office within the EU. The registered address can be anywhere in England, Wales or Scotland (we are able to offer this service for Scottish companies), provided the company is registered in that country. The address of such office on registration and all changes thereafter must be notified to the Registrar (although it is not necessary to state the actual address as opposed to the country of registration in the Memorandum).
In common with registered limited companies in other jurisdictions, UK-registered limited companies are legal entities - they are treated as persons in their own right, separate from the directors who manage them and the shareholders who own them. This means that companies can bring and defend legal proceedings, earn money and incur debts, all on their own behalf. The shareholders' liability is usually limited to paying to the company the price they have agreed to pay for their shares, and it is only in very particular circumstances that a director or shareholder can be obliged to contribute to the assets of a company in the event it becomes insolvent.
Companies are governed by the Companies Acts 1985 and 1989 (along with various subsequent amendments); these Acts set out the legal rules under which companies are run, and the limitations upon the actions and powers of shareholders and directors.
A Company Limited by Shares may Either be Private or Public: A company limited by shares may either be private or public. The difference between these types of companies depends upon how the company has been constituted. To be a public company, the company must: state that it is a public company in its constitution; include the words "public limited company" (or "plc") at the end of the company’s name; satisfy certain requirements as to the minimum amount of share capital. One of the major differences between a private limited company and a public limited company is that a public limited company may offer its shares for sale to the public through a recognised stock exchange.
In contrast, a private limited company may not offer its shares to the general public. The rest of the information contained in this section applies to private limited companies. Specialist advice should be sought if you decide you want to set up a public limited company. You May Use This Form to Set-Up a Public Limited Company:E-Quick PLC Incorporation Package - £52.00
HOW TO INCORPORATE A PRIVATE COMPANY?
Company registration in the United Kingdom is easy and straightforward. No permission is required to establish a business presence, although there is some regulation of the use of business and trading names. All companies registering in the UK are required to do so with Companies House and have to submit accounts as well as Annual Returns. When making a decision to proceed with a company formation, there are many points to consider seriously. When you proceed with a UK company formation, you will take on the responsibility of being a director and/or secretary.
Therefore if you decide on a limited company formation, you need to weigh out every option and aspect, it's a very important decision and you don't want to make any mistakes, as this will affect the future viability of the limited company. In general there are very few legal requirements for overseas clients when forming a company. However, you will need to have the following:
Registerred Office Address: This must be an actual address in the UK (England, Wales or Scotland), not a PO box or similar. We can provide you with a registered office facility in England, Wales, Scotland and Northern Ireland which includes forwarding of all official government mail overseas.
Appointing the Directors of the Company. How Many? Every private limited company needs to have at least one director (and a secretary). There is no maximum limit to the amount of directors you can have. Companies must keep a register of directors and secretaries, which must be available for public inspection. Directors can be either an individual or corporate entity and there need only be ONE director to incorporate a company. There are no residency or nationality requirements for company directors. If there is only one director he or she cannot also be the secretary.
However, if there are two, one can be secretary as well. There are no qualification requirements for either directors or secretaries.
Share Ownership: Directors are not generally required to own shares in the companies that they manage, but there is nothing to prevent them from doing so, and they often do. Among other things, the directors are responsible for the management of the company. The directors are responsible for ensuring that the company does everything that it is obliged to do by law.
All directors are personally responsible for ensuring that the accounts are prepared, circulated to the members (those who own the company), and delivered to Companies House on time. Make sure all of the directors understand their responsibilities.
Appointing the Company Secretary. What Does a Company Secretary do? Every private limited company needs to have a secretary (and at least one director). The secretary is the chief administrator for the company. He or she normally takes charge of ensuring that any documents, which need to be sent to Companies House, are sent on time. The secretary can also be a director, and therefore have the same responsibilities as the other directors.
If the secretary isn't a director, he or she is still is an officer of the company and is responsible for it's actions (with the exception of the companies accounts, which are the personal responsibility of the directors).
Who Owns the Company? The members. A company is owned by "the members", usually shareholders. How many? There is no maximum amount of shareholders in a private limited company. As long as the shares have not been offered to the general public.
It is possible for a company to have just one member, and for that member to have only one share.
Is there a Minimum Amount of Capital Required to Register the Company? There is no statutory minimum or maximum capital for a private limited company, (although a public limited company has to meet certain capital requirements).
How Much is there to Lose? A company may have limited liability for its members. The effect of this is that, if a company is unable to pay it's debts and is put into liquidation, the members will not be required to contribute more than they have actually paid, or agreed to pay, towards settling it's debts. A private company can be limited by shares or by guarantee, (which is a commitment to contribute a given sum if the company is wound up). E.g. your bank may ask for a directors' personal guarantee on a company's loan.
Apostille of Company Documents: For UK company documents to be recognised outside of the United Kingdom they must be issued with an Apostille certificate. This certificate verifies the UK documents to be legal and removes the need for further proof of authenticity. We provide the service to obtain an Apostille certificate for any document produced in the UK.
We strongly advise you consider ordering this service from Coddan at the time of incorporation of your new limited liability company. The Apostille can be arranged at a later date but we would normally charge our standard prices. If your company documents do not include an apostille you may experience problems with non-UK authorities in the future. For example non-UK banks or courts will require legalised documents before recognising your company as a legitimate UK business entity. This could potentially cause problems and delays that could be damaging to your business. You May Use This Form to Incorporate a New Company:E-Quick Incorporation Package - £32.00
Partnership: Individuals, including overseas investors, can set up as a partnership in the UK. The partners are jointly and severally liable for all debts. This means that if some partners cannot be made to pay their share of any debts, the other partners become liable in addition to their share.
Limited Partnership: A limited partnership consists of: one or more persons called general partners, who are liable for all debts and obligations to the firm; and one of more persons called limited partners, who contribute a sum or sums of money as capital, or property valued at a stated amount. Limited partners are not liable for the debts and obligations of the firm beyond the amount contributed. A limited partnership must be registered under the Limited Partnership Act of 1907. To register, you must deliver a statement (Form LP5), signed by all the partners, to Companies House.
Limited partners may not: draw out or receive back any part of their contribution to the partnership during its lifetime; or take part in the management of the business or have power to bind the firm. An overseas limited partnership usually cannot usually register in the UK because its main place of business has to be in the UK, and an overseas partnership would generally do most of its business abroad.
A limited partnership consists of one or more persons called general partners, who are liable for ALL debts and obligations of the firm; and one or more persons called limited partners, who contribute a sum or sums of money as capital, or property valued at a stated amount. Limited partners are NOT liable for the debts and obligations of the firm beyond the amount contributed.
What restrictions are there on the limited partners? Limited partners may not draw out or receive back any part of their contribution to the partnership during its lifetime; or take part in the management of the business or have power to bind the firm. If they do, they become liable for all the debts and obligations of the firm up to the amount drawn out or received back or incurred while taking part in the management, as the case may be.
Who can be a partner? Generally speaking, an individual or a legal body such as a company may be a partner in a limited partnership, either as a general or as a limited partner. A person cannot be both a general and a limited partner at the same time.
Must limited partnerships register? Yes. Until your partnership is registered, it will be regarded as a general partnership with both the general and limited partners jointly and severally responsible for any debts and obligations incurred.
Can an overseas limited partnership register? Not usually. The Limited Partnership Act requires partnerships to register in that part of the United Kingdom where their principal place of business is situated or is proposed to be situated. An overseas partnership usually has its principal place of business overseas, and would not be registered for that reason.
Can I choose any name I wish for my partnership? Not entirely. No name will be registered that is the same as that of a limited company, other legal body, or another limited partnership already on the register at Companies House. In addition, the names of limited partnerships are controlled by the Business Names Act 1985. Also the use of certain names is an offence under certain Acts. In particular, it is an offence for a person who is not a public company to use a name ending in 'public limited company' or its Welsh equivalent, and it is also an offence for any person to use a name which ends with 'limited' or its Welsh equivalent, unless duly incorporated with limited liability (see sections 33 and 34 of the Companies Act 1985).
Is there a limit on the number of partners? A limited partnership may not normally consist of more than 20 persons. However, under section 717 of the Companies Act 1985 there are a number of exceptions to this rule, including: a partnership carrying on practice as solicitors and consisting of persons each of whom is a solicitor. A partnership carrying on practice as accountants where the partnership is eligible for appointment as a company auditor. A partnership carrying on business as members of a recognised stock exchange and consisting of persons each of whom is a member of that exchange.
A partnership carrying on business as surveyors, auctioneers, valuers, estate agents, land agents, or estate managers and consisting of persons of whom at least three-quarters are members of the Royal Institute of Chartered Surveyors or the Incorporated Society of Valuers and Auctioneers and of whom not more than one-quarter are limited partners.
A partnership carrying on business as insurance brokers and consisting of persons each of whom is a registered insurance broker or an enrolled body corporate. (For the meaning of 'registered insurance broker' and 'enrolled body corporate' see section 29(1) of the Insurance Brokers (Registration) Act 1977). A partnership which is a collective investment scheme the operator of which, or the manager of the investments of which, is an authorised person under Part IV of the Financial Services and Markets Act 2000 or a European Economic Area firm or a Treaty firm with permission under the Act to operate the scheme or manage the investments.
What if some of my partnership details change? If any alteration is made to any of the details previously registered, Companies House must be notified of the change within seven days.
Do I have to publish any details of the partnership? The Business Names Act 1985 requires all businesses trading under names other than those of their owners to display their owners' names and an address at which documents can be served. This information must be displayed both at business premises and on business stationery. It must also be supplied in writing at the request of any person with whom you are doing business. Where the partnership consists of more than 20 persons certain exceptions apply to the business stationery requirements.
Can a limited partnership be dissolved? Yes. In the event of the dissolution of a limited partnership, the general partners must wind up its affairs unless the court orders otherwise. Subject to any agreement between the partners, a limited partner is not entitled to dissolve the partnership by notice, and the other partners are not entitled to dissolve the partnership merely by reason of any limited partner suffering his share to be charged for his separate debt. The death or bankruptcy of a limited partner is not a ground for dissolution. The fact that a limited partner is a 'person of unsound mind' is not a ground for dissolution of the partnership by a court, unless the person's share in the partnership cannot be otherwise ascertained and realised.
Who must deliver these particulars? The general partners are responsible for the delivery of particulars whether or not the preparation of the documents was delegated to accountants or to anyone else.
The Limited Partnership Act 1907 provides for the imposition of penalties for various defaults in carrying out the requirements of the Acts and for failing to send to the Registrar the required forms. Notice of any arrangement or transaction under which a general partner will become a limited partner in the firm must be advertised in the London, Edinburgh or Belfast Gazette, as the case may be. Notice must also be advertised in the Gazette of any arrangement or transaction under which a limited partner's share in the firm will be assigned to somebody else. Until this is done these arrangements or transactions have no effect.
Limited Liability Partnership (LLP): Non-UK residents can now, in certain circumstances, use a LLP as a tax-efficient vehicle for international trade. This is in much the same way as non-UK resident companies were used prior to changes in the law for company residence tests in 1988. A new form of association/partnerships with limited liability became available when The Limited Liability Partnerships Act 2000 came into force on 6 April 2001.
An LLP is an alternative corporate business vehicle that gives the benefits of limited liability but allows its members the flexibility of organising their internal structure as a traditional partnership. Any new or existing firm of two or more persons will be able to incorporate as an LLP. Limited Liability Partnerships will have similar disclosure requirements to a company including the filing of accounts.
A Limited Liability Partnership, or "LLP", is not a partnership in the true sense of the meaning of that word. However, an LLP has certain characteristics which identify it as being at least a cousin of the limited partnership. The LLP is a true hybrid; for example, whilst an LLP is a separate legal entity (indeed, it is expressly stated to be a body corporate), there are no publicly filed constitutional documents. In international tax planning terms, the LLP represents both a backward and forward step. It is backward in the sense that it is now possible again for a UK incorporated entity to be managed and controlled from anywhere in the world, with few reporting requirements to the Registrar of Companies and, in certain circumstances, nominal reporting requirements to the Inland Revenue. It is a forward step in the sense that it gives international tax practitioners a UK alternative to the Delaware LLC.
The key characteristics of an LLP can be summarised as follows: an LLP is a separate legal entity under UK law; it is a body corporate. An LLP has unlimited capacity. All the members of an LLP have limited liability. All of the members of an LLP can, and commonly will, participate in the carrying on of the LLP's business. The relationship between the members themselves and the members and the LLP may be governed by a written membership agreement; any such written agreement will be a private document (i.e. there is no requirement to file it with the Registrar of Companies).
So long as the LLP is carrying on a trade, profession or other business with a view to profit, it will be fiscally transparent for income tax and capital gains tax purposes. Annual returns and annual accounts must be filed with the Registrar of Companies. An annual tax return will need to be filed with the Inland Revenue, but if the LLP does not carry on any trade in the UK through a permanent establishment and has no UK source income, this will be a nil return.
For an LLP to be incorporated, there must be at least two persons associated for carrying on a lawful business (which includes an investment business) with a view to profit. Those two persons can be individuals, companies, trustees, partnerships etc., and they can be resident anywhere in the world. The process of incorporating an LLP is similar to that for a limited company.
An LLP is incorporated by delivering an incorporation form, which contains details of the name of the LLP, the legal domicile (i.e. England and Wales or Scotland) of the LLP, the names and addresses of each of the members (including the designated members) of the LLP and the registered office address of the LLP, to the Registrar of Companies.
A small incorporation fee must also be paid. An LLP does not have an equivalent to a company's Memorandum and Articles of Association. Members may (and should) put in place a written membership agreement to govern the relationship between the members themselves and the members and the LLP; this will remain a private document. In the absence of express agreement on particular issues, certain default statutory provisions will automatically apply to the LLP.
There is no limit on the maximum number of members, although there must be at least two formally appointed members at all times. Members are divided into two categories, namely designated and non-designated members. The duties imposed on designated members are similar to those that would normally be placed upon a director or secretary of a company limited by shares or guarantee.
These are additional to the duties every member has to the LLP and include appointing auditors, signing and delivering accounts and annual returns to the Registrar of Companies, notifying the Registrar of Companies of changes to the LLP (including changes in membership, name or registered office address) and acting on behalf of the LLP if it is wound up and dissolved.
An LLP must have at least two members with designated member status. In the event that an LLP has no designated members, or only one, every member of the LLP is deemed to be a designated member. Changes to the designated or non-designated status of any member can be made at any time with the agreement of the other members, provided that the minimum requirement of having at least two designated members is always complied with, and the relevant changes are notified to the Registrar of Companies.
Whilst an LLP carries on a trade, profession or other business with a view to profit, it will be (in common with general partnerships and limited partnerships) fiscally transparent for income tax and capital gains tax purposes. The profits (and losses) of an LLP will be directly attributed to its members, in accordance with the terms of the profit (and loss) sharing arrangements set out in any oral or written membership agreement, subject only to statutory adjustments in respect of, for example, relief for losses.
Income and capital gains are therefore treated as income and gains of the members, as set out in the Members' Agreement. If the members are not resident in the UK and the income and gains are not from a UK source or trade, then they will have no UK tax liability. There are some anti-avoidance provisions to ensure that a LLP is not used to mitigate UK tax that might otherwise be payable.
In particular, whilst they can be suitable for international trade, they should not be used for investments or property holding as specific anti-avoidance legislation is being introduced to counter their use in these circumstances. Furthermore, the profit (and loss) sharing ratios can be changed at any time and, if care is taken, any such change can be effected without adverse UK tax consequences for the affected members.
That being so, if all of the members of an LLP are non-UK resident, and the LLP does not carry on a trade in the UK through a permanent establishment and has no UK source income (but it carries on a trade, profession or other business, including an investment business, wholly outside the UK), there will be no income, profits or gains to charge to UK tax and, therefore, the annual tax return will be a "nil" return (indeed, it may be possible to convince the Inland Revenue to overlook the requirement to file an annual tax return if it will always be a "nil" return).
Finally, it should be noted that section 267A, Inheritance Tax Act 1984 ("IHTA 1984"), states that, for the purposes of inheritance tax, members of an LLP own the property of and carry on the business of the LLP, and any dealings between the members and the LLP are simply dealings between the members themselves; in other words, an LLP is fiscally transparent for inheritance tax purposes as well. This is different to the approach taken for the purposes of inheritance tax in respect of interests in general and limited partnerships.
The liability of the members of the UK LLP is limited to any agreed capital contribution. No minimum capital contribution is prescribed so this could be zero. It must have at least two members. These may reside anywhere in the world and may be bodies corporate registered in the UK or elsewhere. In particular, the rules relating to the LLP Agreement that governs the relationship between the members leaves them free to determine their relationship within the LLP. This is in contrast to the limited company, in which the relationship between the directors and shareholders is strictly defined and governed by the Companies Act 1985 and related legislation, and the common law. The Agreement is not filed on the public record. You May Use This Form to Register a New LLP:Economy LLP Incorporation Package - £125.00
WHAT IS A BRANCH? WHAT IS A PLACE OF BUSINESS?
Instead of setting up a new UK limited company, it is possible simply to open a branch office in the UK. It is alternatively possible to register a "place of business" with even less formality. Companies can of course carry on business in the UK without needing any corporate presence in the UK - simply shipping goods into the UK from abroad will not necessarily require the non-UK company to have a presence there. Equally, a company could carry on business in the UK via an agent, franchisee or distributor.
However, any non-UK company with a physical presence in the UK (other than as a UK registered company) is required to register either a branch office or a place of business. Registration as a branch office is appropriate where this is essentially part of an overseas company which is organised to carry on business through local representatives in the UK rather than referring it abroad. Registration as a place of business is appropriate where its activities in the UK are not sufficient to define it as a branch. Such activities might include internal computer processing, warehousing, or simply a representative office.
A branch (which constitutes a permanent establishment) is chargeable to Corporation Tax on its annual profits and on capital gains (at the Corporation Tax rate) arising on the disposal of any asset situated in the UK, which is used for the purposes of the branch or its trade. A branch is entitled to the capital allowances on plant and machinery and industrial buildings in the same way as a UK resident company. A branch must register for VAT in the same way as a UK company and is in the same position for taxes on interest and royalties, save that any "interest" or other charges made against it by the overseas corporation of which it is the ranch will be ignored for UK tax purposes.
Every overseas company which is incorporated outside the United Kingdom (England and Wales, Scotland and Northern Ireland) and Gibraltar and which establishes a branch within Great Britain is required to register a branch. It is not necessary for an overseas company which has a branch to register under the place of business regime as well. You May Use This Form to Establish a Branch: Application to Establish a Branch Office - £150.00
An overseas company MAY HAVE more than one branch within Great Britain. If they each have management independence, each branch will require to be registered. If there is a main office to which the other offices report it is only necessary for the main branch to register. If two branches both report direct to the overseas parent both must register. The non-UK company's name is also a factor. Initially, the UK operation will be registered under the name of the non-UK company, but after this the UK operation will be subject to the same restrictions on company names as UK-registered companies.
A name will be unacceptable if the non-UK company has the same name as a company already registered in the UK, or has a name which is prohibited under the law (e.g. because it is offensive, or suggests criminal activity). In this case, the UK operation will have the opportunity to change its name to one which is acceptable; if it does not do this, it will be unable to conduct business in the UK under its original name. A branch office or place of business must make the following clear on all of its correspondence: the non-UK company's name and country of incorporation; that the liability of the members of the non-UK company is limited (if applicable); the place of registration and the registration number of the branch office (if applicable).
A place of business is a premise where there is a physical or visible indication that the company may be contacted there. An overseas company also has to register if it habitually conducts business from a particular location in Great Britain even if there is no physical sign of the company's connection with it. An overseas company with a place of business within Great Britain which is not also a branch, must register with the Registrar of Companies in England and Wales or in Scotland.
An overseas company with a place of business in England or Wales must register in Cardiff and an overseas company with a place of business in Scotland must register in Edinburgh. An overseas company with places of business in both England and Wales and in Scotland must register in Cardiff and Edinburgh. You May Use This Form to Register a Place of Business: Application to Register a Place of Business - £150.00
When you decide to set up a business in the UK, you may decide not to do this alone. Whether for the purposes of increasing your local knowledge or to obtain new expertise or technology, you may wish to engage in a joint venture with another company. This may be a local (UK) company or another overseas company. Whatever the background, there are essentially two ways of doing this.
You can set up a company or branch office and then simply have it work in partnership with the other company. In this case, you will simply follow the company incorporation procedures or branch office procedures and then enter into appropriate contracts with the partner company. Alternatively, you can create a joint venture company in which both you and the partner company have shareholdings, can appoint directors and so on.
These are often useful for joint research projects or where you wish to share risk with a third party. Joint venture companies have no special legal status; they are simply companies where two (or more) parties divide the shareholding and the board of directors between them. They do, however, tend to have specially-drafted Articles of Association, as it is necessary to place restrictions on how the company is governed.
Typically they provide for much tighter restrictions on voting rights, and on share transfer rights (stipulating, for example, that shares can only be transferred to existing shareholders in the company pro rata to their existing shareholding). The balance of power in a joint venture company is a particularly important consideration. In many cases where there are only two parties, they will each have an equal shareholding.
This effectively means that all votes require unanimity since neither party can outvote the other. In certain circumstances, however, the parties may agree to unequal shareholdings. In this case, great care must be taken, when drafting the Articles of Association, to protect the rights of the minority shareholder; otherwise, he may find himself in a position where he cannot influence the running of the joint venture company.
Non-competition restrictions are also a vital component of joint venture articles, particularly when entering into a joint venture with a local company. You will not want your partner company to be competing directly with the joint venture company and you may well wish to restrict the overlap between the two. However, competition (anti-trust) law is a sensitive and complex area in the UK and one which will require specialist legal advice.
Even the most promising joint venture may go wrong, whether through bad luck, a misconceived premise or disagreement between the parties. This last possibility bears serious consideration as a falling-out between the parties can leave the joint venture company unable to function and, equally, unable to shut down. It will usually be worthwhile setting up a procedure to either wind up the company or oblige one party to sell its shares to the other in the event of any prolonged deadlock, in order to avoid being involved in a frozen company which cannot effectively do anything. On a related note, it is also common to provide that where one party puts itself in breach of the agreement, the other innocent party has the right to buy out the shares of the party in breach at a fair price.
TAX IMPLICATIONS OF OWNERSHIP OF UK RESIDENTIAL PROPERTY
The purpose of this note is to consider in general terms how best to structure the ownership of residential property in the United Kingdom as a home or as a second home. It aims to summarise the main advantages and disadvantages of some possible ownership structures, with particular reference to the UK tax implications. Different considerations apply to the structuring of investment in UK property as distinct from property for residential use. The note is mainly aimed at foreigners wishing to acquire property for private use in the United Kingdom.
The precise consequences will vary depending on whether the property may be occupied by individuals who are: Not UK resident or ordinarily resident; UK resident or ordinarily resident but non-domiciled; UK resident, ordinarily resident and domiciled. Occupation of the property may be long-term, short-term or casual and the individuals concerned may be in similar or different circumstances from a UK tax perspective. In a note of this length, it is impossible to do other than summarise the basic tax rules. There are various exceptions or qualifications to these rules, which are not covered here.
Personal Ownership: This is the most straightforward structure. Ownership of residential property in the UK by an individual generally has the following tax consequences: -
The Property has a UK Situs for Inheritance Tax (IHT) Purposes: Consequently, certain gifts of the property or its transmission on death will give rise to inheritance tax liability regardless of the domicile of the owner. Inheritance tax on death is currently payable at 40% of the value of the taxable estate. The most important exceptions are the nil rate band, which allows each individual an exemption, which is currently £231,000 (1999/2000). Property may pass between spouses tax-free if both have the same domicile. If they have different domiciles, then a maximum of £55,000 may pass tax-free between them. Transfer of the shares by an executor to beneficiaries under a will or on intestacy will not give rise to stamp duty.
If the owner is not UK resident or ordinarily resident, then the sale of the property would not be subject to capital gains tax (CGT). A UK resident shareholder will be subject to capital gains tax on sale, unless the property qualifies as the individual’s main private residence, in which case the sale is tax-free. Stamp duty is payable on the conveyance or transfer on sale of property. If the value of the consideration is under £60,000, the amount is nil. If the value of the consideration does not exceed £250,000, the rate is 1%. If the value of the consideration does not exceed £500,000, the rate is 2%. If the value of the consideration exceeds £500,000, the rate is 3% (1999/2000).
The IHT risk can be covered by insurance, depending on age and health. On the basis that the property may increase in value and that rates of IHT may change, the position would need to be monitored on a regular basis to ensure that adequate insurance cover was in force. The insurance policy itself would have to be properly structured (probably using a trust) to avoid an additional IHT charge on the proceeds. Principal private residence is considered on a worldwide basis. An election to this effect can be made (within certain time limits) if, as a matter of fact, it is not the only or main residence. On death, UK probate formalities will need to be satisfied in order for title to the property to pass to the intended beneficiary. This is likely to involve some level of extra cost and inconvenience. Sometimes, these formalities can be avoided by holding title in the name of a corporate nominee.
Ownership by a Non-UK Resident Company: Here, the property would be owned by a company, the shares of which would be owned by the individual. Normally, the balance of advantage lies in favour of using a specially formed company, which holds no other assets. If the property is owned by a non-UK incorporated company, then the following will arise: -
If the shares in the offshore company are held on a register outside the UK only or if the shares are bearer shares and are held outside the UK, then in the case of a non-UK domiciled individual owning the shares, no liability to inheritance tax will arise as the asset will not have a UK situs. UK domiciled shareholders will continue to be liable to inheritance tax, because their worldwide estate is taxable.
If the company is not resident in the UK, the sale of the property will not normally be subject to capital gains tax in the hands of the company. However, if the shares in the company are owned by UK residents and the company is a close company, the gain will be attributed to UK resident shareholders unless they are not domiciled. Ownership of a property is normally of an investment nature and therefore a capital gain will arise. Gains on the sale of the shares would be taxable in the hands of a UK resident. In the case of a non-domiciled resident, this would be on the remittance basis.
Similarly, ownership of property for residential purposes will not normally give rise to a charge on the sale of the property or the shares under the anti-avoidance provisions of Taxes Act 1988 Section 776, which could result in a tax liability on the sale of the property in the hands of the company or of the shares in the company if the section is applied. Residence of the company is dependent upon where central management and control is exercised.
If the shares are owned by a non-resident and the directors are all non-resident and if the decision making in relation to the company is made by the shareholders or directors, then the company will not be UK resident. This is a matter that will be closely examined by the Inland Revenue. Where the shareholder is a UK resident, and directors are non-resident but act as nominees, there is a strong inference that the company is UK resident. If it is UK resident, the sale of the property will give rise to corporation tax on the gain.
Sale of the shares outside the UK will not normally give rise to stamp duty. Sale of the property will give rise to stamp duty as described above.
Since 1984, the Inland Revenue have taken the view that they may impute an employment benefit on occupiers of the property owned by such companies in certain circumstances. This may happen where living accommodation is provided for a person by reason of employment. Where the Section applies and the cost of the accommodation exceeds £75,000, an amount is deemed to be the occupier's income. For the first six years of occupation, the amount is the cost of the property in excess of £75,000 multiplied by a prescribed interest rate. The current rate (since August 1997 ) is 7.25%. After the first period, the amount is calculated by reference to the market value of the property in excess of £75,000. The Inland Revenue apply this provision to an actual employee or officer. They also seek to apply this to a "shadow" director.
A shadow director is any person in accordance with whose directions or instructions the directors of the company are accustomed to act. Thus, where the directors simply take instructions from the occupier, the Inland Revenue will seek to apply these provisions. The charge will also apply to a shadow director where the accommodation is made available to the individual’s "family or household". This means his spouse, children and their spouses, his parents, his servants, dependants and guests. Thus, the charge may be imposed on a shadow director who does not occupy the property if a member of his family such as an adult child living away from the family or household does.
The anti-avoidance provisions of Taxes Act 1988 Section 739 or 740 will be potentially applicable if income arises in the company, for example because it has an interest bearing bank account. Such income will be deemed to be that of the transferor if UK ordinarily resident. This would include a subscriber to shares in the company or the transferor of the property itself to an offshore company. Where Section 739 does not apply and there is income earned by the company in the same way, then the provision of the accommodation will be a benefit to the occupant under Section 740.
To the extent that the value of the property is matched by income earned by the company, this will give rise to a UK tax liability. The provisions of Sections 739 and 740 only apply to transferors and beneficiaries respectively who are ordinarily resident in the UK. Ownership through a company may avoid UK probate formalities on death.
Trust Ownership of Offshore Company: Where the shares in the offshore company are owned by an offshore discretionary trust, the following arise:-
The tax consequences will be similar to those in paragraph 2 above. However, ownership of shares by a non-resident will be helpful in indicating that the company itself is non-UK resident. If the trustees are themselves non-UK resident, then the trust will be non-resident. Secondly, if the occupiers are beneficiaries under the trust, then this may be helpful in addressing the application of the deemed employment benefit, because it may be said that occupation is by virtue of being a beneficiary, rather than a deemed director.
If the occupant is not a beneficiary, then this inference may not be drawn. Thirdly, if the settlor is not UK domiciled at the time, the shares will be excluded property, even if the settlor subsequently becomes UK domiciled. If the settlor is UK domiciled at the time of transfer, then the transfer itself will be subject to inheritance tax at the lifetime rate of 20%.
The trustees themselves will become liable to inheritance tax on each tenth anniversary of the trust and on property distributed out of the trust. The rate is currently 6% of the value of the trust property. The comments above relating to Taxes Act 1988 Sections 739 and 740 will apply where there is a trust. It should also be borne in mind that those provisions are applicable in relation to "associated operation" which may result in the income of other entities being relevant to the attribution of income to a UK resident settlor or to beneficiaries occupying the property.
There may also be Capital Gains Tax consequences for UK resident and domiciled settlors of the trust on sale of the property and for UK resident and domiciled beneficiaries who occupy the property. Non domiciled individuals will not be subject to CGT in these circumstances.
Tax Tips for Non-UK Residents: A UK resident company is liable to UK corporation tax on its worldwide profits. A non UK resident company is liable to UK corporation tax on the profits of a trade carried on by it through a branch or agency in the UK.
Legislation has recently been introduced (applying to foreign companies' accounting periods starting on or after 1 January 2003) which has modernised the terminology used in the relevant legislation by referring to "permanent establishments" (which is the internationally recognised term and the one used in the UK's double taxation agreements) rather than "branches" or "agencies". In particular, the legislation provides that the profits attributable to the permanent establishment are the profits which it would have made if it were a distinct and separate enterprise, engaged in the same or similar activities under the same or similar conditions, dealing wholly independently with the rest of the non-resident company of which it is a part. In applying the legislation the permanent establishment is treated as having equity and loan capital in the proportions relevant for an independent company operating in the UK. The relevant legislation is construed in accordance with OECD guidelines. A non UK resident company which carries on a trade in the UK otherwise than through a permanent establishment is liable to UK income tax rather than corporation tax on the profits attributable to that trade.
It is not possible generally to reduce the amount of UK taxable profits by means of adopting artificial pricing methods. Under both UK tax law and the UK's double tax treaties, the UK Revenue is able to ignore actual prices and charge tax as if arms' length prices had been paid. This would catch, for example, excessively high interest and management charges and royalties that are paid to the non-resident parent of a UK subsidiary with a view to reducing the profits subject to UK tax. Payments of interest, royalties etc. by a UK permanent establishment to its overseas head office are not deductible for UK tax purposes.
If significant start-up losses are anticipated, one potential tax advantage of establishing a permanent establishment rather than a subsidiary is that, whereas such losses will not be utilised by a subsidiary until it becomes profitable, the losses of a permanent establishment may be eligible for tax relief in the home state of the overseas company.
There is no withholding tax on distributions by way of dividend made by a UK resident company (whether to a UK or non UK resident shareholder) or on the transfer of profits by a UK permanent establishment to its non-resident "parent".
Most UK double tax treaties provide that non-resident shareholders in a UK resident company may reclaim from the UK Inland Revenue a proportion of the tax credit to which UK resident individuals are entitled in respect of dividends paid by UK companies, less a withholding tax.
A non UK resident company which does not carry on a trade in the UK may, nonetheless, have a liability to UK income tax on UK source income received by it. The UK income tax liability is limited to the amount of income tax required by UK tax law to be deducted at source from the relevant payment. This will include rental income from UK property, interest (other than interest paid by a UK bank) and certain types of royalties.
Overseas companies should be aware however that the UK operates a system of value added tax (VAT) with a current maximum rate of 17.5% on the provision of most goods and services. Whether a business operating in the UK will be required to register for and charge VAT on its supplies will depend upon the facts, such as company turnover.
Import duties are also levied on imported goods at varying rates in accordance with the common customs tariff of the EU. The amount of duty payable depends on a number of factors, including condition, origin, source, end use, valuation and description.
Stamp duty is payable on documents transferring shares and other marketable securities. The rate payable for such transfers is 0.5%. Stamp duty land tax is payable on transactions involving UK land and buildings. The rate of stamp duty land tax varies from 0% to 4% depending on the type of transaction and the aggregate price payable.
The UK currently has three rates of income tax for earned income, depending on levels of income. The highest rate is 40%. Capital gains and savings income are taxed at rates depending upon the level of the individual's total income and gains.
Income tax on earnings is collected through the Pay As You Earn (PAYE) system operated by employers, as are National Insurance Contributions (NICs). NICs are payable by both employers and employees.
A foreign national coming to work in and becoming resident in the UK will be liable to UK tax on his UK income and gains. Assuming that he is not domiciled in the UK, however, he will not be liable to UK tax on his non UK source income and gains, unless such income or gains are remitted to the UK. The rules in this regard are complex and advice should be obtained before moving to the UK.
Top 10 Tax Tips for Individual Expatriates Coming to the UK:
1. Ensure that you are treated as not ordinarily resident in the UK. As a resident, but not ordinarily resident individual, you will only be liable to UK tax on remittances of earnings for duties performed outside the UK, even if carried out under a single contract of employment.
You will be treated as ordinarily resident if on arrival you intend to stay in the UK for three years or more, or you purchase UK property in advance of, or during, your period of stay in the UK.
2. Consider dual contracts if you are treated as ordinarily resident in the UK. Even if you are treated as ordinarily resident in the UK you may be still able limit your liable overseas earnings to amounts remitted to the UK, if your overseas duties are carried out under a separate contract of employment with a non-UK resident employer.
3. Are you entitled to temporary relocation expenses for employees seconded to the UK? If you have been seconded to the UK by a non-UK resident employer for a period of two years or less, your employer (or the employer to whom you have been seconded) can provide "reasonable" accommodation, and pay the associated utility costs tax free.
This relief is available until it becomes clear that the two year period will be exceeded, but in this event, the relief will not be withdrawn retrospectively .
4. Minimise your taxable accommodation benefit, if you do not qualify for tax-free temporary relocation expenses. If your employer provides you with rent -free accommodation, a taxable benefit will normally arise. This will either be equal to the rent paid to an independent landlord, or if the property is owned by the employer, a percentage (the official rate) of the cost, or current value of the property, over £75,000 The official rate is currently 5%.
The benefit may be substantially reduced, if instead of renting the property, a short lease is acquired from a landlord at a peppercorn rent.
5. Maximise your tax free travel allowance. Foreign domiciled individuals, who do not have a recent history of UK residence prior to their arrival in the UK, are allowed an unlimited number of journeys between the UK and their normal country of residence, tax free, providing that the cost is met by their employer. In addition, the employer can also meet the cost of two journeys per tax year for the spouse and children, tax free.
If your employer is unwilling to meet the cost of all your trips home, but does provide other taxable benefits, consider asking your employer if he will agree to allow you to "swap benefits". Not only will this save you tax, but your employer may also save employers class 1A National Insurance Contributions.
6. Close offshore bank accounts & set up new income & capital accounts. Foreign domiciled individuals are only taxable in the UK on remittances of offshore income and capital gains, arising after they become resident in the UK. It is important to be able to clearly identify these sources, so any offshore accounts should be closed shortly before your arrival in the UK and new income and capital accounts set up. Arrangements should then be put in place so that any interest arising on the capital account should be credited directly to the income account. Remittances to the UK can then be made from the capital account completely tax free.
7. Take advantage of the UK "source" rule. Remittances of overseas income are only subject to UK tax, if the source from which the income is derived, still exists in the UK tax year in which the the remittance is made. Thus, if the capital account, mentioned above, is closed on the last working day of the tax year, and a completely new capital account opened on the first working day of the following tax year, the interest contained in the income account can be transferred to the capital account, or remitted to the UK free of tax.
8. Separate capital gains and losses. Although overseas capital gains are only taxable if the proceeds are remitted to the UK, no relief is available for overseas capital losses. It is therefore important to keep the proceeds of transactions which have produced the capital losses completely separate. The proceeds from such transactions can then be remitted to the UK with no UK tax consequences.
9. Utilise your annual capital gains tax exemption. When the proceeds of a transaction which has produced a capital gain are remitted to the UK, the taxable gain that is deemed to have been remitted is proportional to the proceeds remitted. As there is an annual capital gains tax exemption (currently £8,500) you should consider making capital gains remittances up to this amount if you have no other chargeable capital gains in the year.
10. Take advantage of reciprocal social security agreements. The UK has reciprocal social security agreements with all EEC, and most other developed, countries. Under the terms of such agreements social security contributions are only payable in one of the contracting states. In certain circumstances, it is possible to obtain a certificate of coverage from the normal country of residence, and avoid both NIC and overseas social security liabilities on overseas earnings carried out under an overseas contract of employment. You should check if such an arrangement can be effective in your particular personal circumstances.
From time to time even the best-run business needs some advice or a second opinion. Healthy businesses plan for the future and having an independent review of your strategy can really help - our consultants act as advisers to many industry sectors and can offer you the benefit of having seen what works and what does not. Using the best accounting, budgeting, planning, and reporting tools, we can ensure that you have all the information you need to face future challenges.
For overseas companies setting up in the United Kingdom, our experience of business practices, taxation, and law within the United Kingdom can save them the considerable time, money, and energy required to establish and grow a business while meeting all of their legal obligations. We can also act as trustees for pension schemes, or alternatively, we can audit your pension scheme accounts, guiding you through the minefield of reporting requirements.
We are always looking for opportunities for your business to reduce its tax liability, with proactive tax planning. We also advise clients on international corporate tax and on issues arising from cross-border transactions, into and out of the United Kingdom.
If you are unsure of the best course of action for your business, Coddan can advise you on the best location and type of business entity, and can tailor a solution to your needs. If you wish to retain Coddan in a professional capacity, you can apply for an initial consultation appointment by following the link below. Book an Initial Consultation:use this form to request an initial consultation with one of our specialists
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£ 32.00
This is our most popular package with UK residents, and includes: -
The registration of your company from scratch using your own registered office address, and appoint your own candidates to the roles of director, secretary (if needed), and shareholder;
The provision of a registered office address for 12 months is also included in the price of this package (our registered office address service is charged annually);
Coddan aims to provide all of our clients with the most efficient and convenient services possible. Electronic filing is currently administered for new UK company formations, and Coddan CPM Limited is one of a few select companies that is authorised to present new company documents directly to the UK Companies House, enabling the full incorporation of each company without the need to submit any paper forms. 
Change of Name with revised Mem & Arts if original copy supplied to us - £65.00 
Coddan has everything you need to incorporate your business to get your company off to a great start. When you incorporate on-line with Coddan, you save valuable time and money. Count on us to point your business in the right direction. Incorporate today! Questions about our company or our service? Please 
+44 (0) 207.935.5171 
+44 (0) 141.530.8188 
+44 (0) 289.099.8744 
Instead of setting up a new UK limited company, it is possible simply to open a branch office in the UK. It is alternatively possible to register a "place of business" with even less formality. Companies can of course carry on business in the UK without needing any corporate presence in the UK - simply shipping goods into the UK from abroad will not necessarily require the non-UK company to have a presence there. Equally, a company could carry on business in the UK via an agent, franchisee or distributor. 
The purpose of this note is to consider in general terms how best to structure the ownership of residential property in the United Kingdom as a home or as a second home. It aims to summarise the main advantages and disadvantages of some possible ownership structures, with particular reference to the UK tax implications. Different considerations apply to the structuring of investment in UK property as distinct from property for residential use. The note is mainly aimed at foreigners wishing to acquire property for private use in the United Kingdom.