Income Tax (Trading and Other Income) Act 2005

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).

E-Quick Package

£ 32.00

No Annual Charges

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.

Deluxe Package

£ 557.00

Annual Maintenance Fee £525.00

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.

Legal Requirements to Register an LTD

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Income Tax (Trading and Other Income) Act 2005

2005 Chapter 5 - continued

PART 6, EXEMPT INCOME - continued

back to previous text

CHAPTER 7

PURCHASED LIFE ANNUITY PAYMENTS

Partial exemption for purchased life annuity payments

717

Exemption for part of purchased life annuity payments

(1) No liability to income tax arises under Chapter 7 of Part 4 in respect of so much of an annuity payment made under a purchased life annuity as is within this subsection in accordance with section 719 (extent of exemption).

(2) Subsection (1) is subject to section 718.

(3) The exemption under this section requires a claim.

(4) In this Chapter "purchased life annuity" has the same meaning as in Chapter 7 of Part 4 (see section 423).

718

Excluded annuities

(1) The exemption in section 717(1) does not apply to payments made under the annuities specified in subsection (2).

(2) The annuities are-

(a) an annuity the whole or part of the consideration for which consisted of sums satisfying the conditions for relief under section 266 of ICTA (life assurance premiums),

(b) an annuity purchased following a direction in a will, and

(c) an annuity purchased to provide for an annuity payable as a result of a will or settlement out of income of property disposed of by the will or settlement.

(3) For the purposes of subsection (2)(c), it does not matter whether or not capital could also be used to pay the annuity.

719

Extent of exemption under section 717

(1) This section sets out the rules for determining the extent to which an annuity payment is within the exemption in section 717(1).

(2) The rules depend on-

(a) whether or not the amount of the annuity payments under the annuity depends solely on the duration of a human life or lives (see subsections (3) to (5)), and

(b) whether or not the annuity's term depends solely on the duration of a human life or lives (see subsections (6) to (8)).

(3) If the amount of the annuity payments depends solely on the duration of a human life or lives, the same proportion of each payment ("the exempt proportion") is exempt.

(4) But if the amount of the annuity payments also depends on another contingency, each payment is exempt so far as it does not exceed a fixed sum ("the exempt sum").

(5) If an annuity payment within subsection (4) is less than the exempt sum, the shortfall is added to the exempt sum for the next payment (and so on).

(6) The ways to determine the exempt proportion and the exempt sum differ according to whether or not the annuity's term depends solely on the duration of a human life or lives.

(7) If the annuity's term depends solely on the duration of a human life or lives-

(a) the exempt proportion is determined as set out in section 720, and

(b) the exempt sum is determined as set out in section 721.

(8) If the annuity's term also depends on another contingency-

(a) the exempt proportion is the proportion which is just and reasonable, having regard to the contingencies affecting the annuity and to section 720, and

(b) the exempt sum is the amount which is just and reasonable, having regard to the contingencies affecting the annuity and to section 721.

720

Exempt proportion: term dependent solely on duration of life

(1) In the case of an annuity within section 719(7) (term dependent solely on duration of life), the exempt proportion is -

	PP
AP ×
	AV

where-

AP is the annuity payment,

PP is the purchase price of the annuity, and

AV is the actuarial value of the annuity payments.

(2) The purchase price of the annuity is the total amount or value of the consideration given for the annuity.

(3) The actuarial value of the annuity payments is their value at the date when the first of the payments starts to accrue.

(4) That value is determined-

(a) by reference to tables of mortality prescribed under section 724,

(b) taking the age at that date of a person during whose life the annuity is payable as that person's age in whole years on that date, and

(5) But if it is not possible to determine that actuarial value by reference to the tables mentioned in subsection (4)(a), it is such amount as may be certified by the Government Actuary or the Deputy Government Actuary.

721

Exempt sum: term dependent solely on duration of life

(1) In the case of an annuity within section 719(7) (term dependent solely on duration of life), the exempt sum is -

	1		PM
PP ×		×
	TY		12

where-

PP is the purchase price of the annuity,

TY is the expected term of the annuity in years (and any odd fraction of a year), and

PM is the period in months (and any odd fraction of a month) in respect of which the annuity payment is made.

(2) The purchase price of the annuity is the total amount or value of the consideration given for the annuity.

(3) The expected term of the annuity is the period from the date when the first annuity payment starts to accrue to the date when it is expected that the last payment will become payable.

(4) The expected term of the annuity is determined-

(a) as at the date when the first annuity payment starts to accrue,

(b) by reference to tables of mortality prescribed under section 724, and

(c) taking the age at that date of a person during whose life the annuity is payable as that person's age in whole years on that date.

(5) But if it is not possible to determine that term by reference to the tables mentioned in subsection (4)(b), it is such period as may be certified by the Government Actuary or the Deputy Government Actuary.

722

Consideration for the grant of annuities

(1) This section applies if the amount or value given for an annuity is to be determined for the purposes of sections 720(2) or 721(2) and either-

(a) consideration is not given solely for the annuity, or

(b) it appears that the amount or value of the consideration nominally given for it affected, or was affected by, the consideration given for something else.

(2) For the purposes of subsection (1), consideration given for a right to a return of premiums or of other consideration for an annuity is treated as given solely for the annuity.

(3) If subsection (1)(a) applies, the consideration is to be apportioned in such way as is just and reasonable.

(4) If subsection (1)(b) applies, the total amount or value of the considerations given is to be apportioned in such way as is just and reasonable.

723

Determinations

(1) Any question-

(a) whether an annuity is a purchased life annuity for the purposes of section 717, or

(b) how much of an annuity payment is exempt,

is to be determined by the Inland Revenue.

(2) A person aggrieved by the Inland Revenue's determination may appeal to the Special Commissioners.

(3) If a person making a payment under an annuity-

(a) has been given notice of such a determination in the way prescribed under section 724, and

(b) has not been notified of any alteration of it,

the determination is conclusive for determining the amount of income tax the person may or must deduct from it or for which the person is liable in respect of it.

(4) A notification of an alteration of a previous determination of any question is itself a determination for the purposes of this Chapter.

(5) Subsection (6) applies if a person making an annuity payment to which the exemption in section 717(1) applies has not been given notice in the way prescribed under section 724 of the amount which is exempt.

(6) The amount of income tax the person may or must deduct, or for which the person is liable, is the amount it would be if none of the payment were exempt.

(7) A person who knowingly makes any false statement or false representation for the purpose of obtaining any exemption from or repayment of tax for any person under sections 717 to 722, this section or section 724 is liable to a penalty not exceeding £3,000.

724

Regulations

(1) The Board of Inland Revenue may by regulations-

(a) prescribe the procedure to be used in giving effect to sections 717 to 723 and this section where no provision is made in those provisions,

(b) apply any provision of the Income Tax Acts, with or without modifications, for the purposes of those provisions or the regulations,

(2) The regulations may, in particular, make provision about-

(a) the time limit for making a claim for exemption from tax under section 717(1) or any consequential repayment of tax,

(b) the information to be provided in connection with the determination of the questions mentioned in section 723(1) and the persons who may be required to provide it,

(d) the way in which such a determination is to be given effect and the making of assessments for that purpose on the person entitled to the annuity,

(e) the extent to which such a determination is to be binding and the circumstances in which it may be reviewed, and

(f) the time limit for appealing against such a determination.

(3) Subsection (2)(d) applies despite anything in section 348 of ICTA (charges on income).

Immediate needs annuities

725

Annual payments under immediate needs annuities

(1) No liability to income tax arises under Chapter 7 of Part 4 in respect of so much of an annual payment made under an immediate needs annuity as is made-

(a) for the benefit of the person protected under that annuity, and

(b) to a care provider or a local authority in respect of the provision of care for that person.

(2) In this section "immediate needs annuity" means a contract for a purchased life annuity-

(a) the purpose or one of the purposes of which is to protect a person against the consequences of the person being unable, at the time the contract is made, to live independently without assistance because of a condition to which subsection (3) applies, and

(b) under which benefits are payable in respect of the provision of care for the person protected.

(3) This subsection applies to-

(a) mental or physical impairment, or

(b) injury, sickness or other infirmity,

which is expected to be permanent.

(4) In this section and section 726 "care" means accommodation, goods or services which it is necessary or desirable to provide to a person because of a condition to which subsection (3) applies.

(5) In this section-

"care provider" has the meaning given in section 726, and

"purchased life annuity" has the same meaning as in Chapter 7 of Part 4 (see section 423).

(6) The Treasury may by order amend-

(a) subsection (2), and

(b) subsection (3), so far as it applies for the purposes of subsection (2).

726

Meaning of "care provider"

(1) In section 725 "care provider" means a person who-

(a) carries on a trade, profession or vocation which consists of or includes the provision of care, and

(b) meets the care registration requirement.

(2) A person meets the care registration requirement in relation to care provided in England and Wales if the person is registered under Part 2 of the Care Standards Act 2000 (c. 14) in respect of the provision of care.

(3) A person meets the care registration requirement in relation to care provided in Scotland if the person provides care as, or as part of, a service which is registered under Part 1 of the Regulation of Care (Scotland) Act 2001 (asp 8).

(4) A person meets the care registration requirement in relation to care provided in Northern Ireland if the person is registered in respect of the provision of care under-

(a) Part 2 or 3 of the Registered Homes (Northern Ireland) Order 1992 (S.I. 1992/3204 (N.I. 20)), or

(b) Part 3 of the Health and Personal Social Services (Quality, Improvement and Regulation) (Northern Ireland) Order 2003 (S.I. 2003/431 (N.I. 9)).

(5) A person meets the care registration requirement in relation to care provided in a territory outside the United Kingdom if the person meets requirements under the law of that territory relating to the provision of care that are comparable to those mentioned in subsections (2) to (4).

(6) The Treasury may by order amend this section.

Prepared 29 March 2005


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