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UK Private Limited Companies – The Facts In 2 Minutes

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UK – Background

UK Private Limited CompaniesThe United Kingdom has a strong tradition of attracting international businesses which are expanding their operations or want a footprint in Europe. 

The UK has the most extensive tax treaty network in the world with over 125 treaties in force.

The UK holds a number of key attractions including:

  • No withholding tax on dividend payments, irrespective of where the shareholder is resident;
  • UK tax exemption on qualifying foreign dividends;
  • Capital Gains Tax exemption where a UK resident company disposes its shareholdings, if certain conditions apply;
  • No UK Capital Gains Tax on profits from disposal of UK Company’s shares by non-resident shareholders;
  • A standard tax rate of 26%, which can be cut to 20%, again if certain conditions are met; and
  • Access to the benefits of EU directives.

UK Private Limited Companies – The Facts

Formation:

24 hours (premium fee applies)
or

5-6 working days (standard incorporation procedure)

Shelf Companies:

Available

Authorised Share Capital:

Unlimited and no restriction on currency

Issued Share Capital:

  • Minimum paid up share capital = £1
  • No restriction on currency
  • No capital tax on issued share capital

Directors:

 

  • Minimum number of directors: 1
  • Individual director required although corporate directors are also permitted
  • No restrictions on residence or nationality

Secretary:

  • Not obligatory
  • No restrictions on residence or nationality

Shareholders: 

  • Minimum number of shareholders: 1
  • Corporate shareholders permitted

Public Filing: 

  • Audited financial statements must be filed every year within 9 months of financial year-end (exemptions available from audit requirement).
  • Annual return must be filed every year

Corporation Tax Rates: 

 

  • Profits up to £300,000 at small company rate 20%
  • Profits between £300,000 and £1,500,000 at marginal rate 27.75%
  • Where profits are above £1,500,000, the entire profits will be taxed at full rate 26%

Note: The small company rate is subject to certain criteria being met. Where a company has other associated companies, the £300,000 small company threshold will be divided by the number of associated companies.

Corporation Tax Returns:

Must be filed within 12 months of accounting period end.

Capital Gains for Companies:

Rates above apply subject to potential exemption where a UK resident company sells shares if certain conditions apply

Withholding Tax:

  • Dividends: 0%
  • Royalties: 20%*
  • Interest: 20%*
(*Can be reduced/eliminated with careful planning or on application double tax treaty relief may be available)

Double Tax Treaties:

Over 125 in force

The Benefits Of UK Holding Companies - Webinar

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