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 2, TRADING INCOME - continued

back to previous text

	CHAPTER 12
	TRADE PROFITS: VALUATION OF STOCK AND WORK IN PROGRESS
	Valuation of trading stock
173	Valuation of trading stock on cessation
	(1) If a person permanently ceases to carry on a trade, in calculating the profits of the trade-
	(a) trading stock belonging to the trade at the time of the cessation must be valued, and
	(b) the value must be determined in accordance with sections 175 to 178 (bases of valuation).
	(2) But no valuation of the stock is required under this Chapter if paragraph 1(2) of Schedule 28AA to ICTA (provision not at arm's length) has effect in relation to any provision which-
	(a) is made or imposed in relation to the stock, and
	(b) has effect in connection with the cessation.
	(3) If there is a change in the persons carrying on a trade, no valuation of the stock is required under this Chapter so long as a person carrying on the trade immediately before the change continues to carry it on after the change.
	(4) If an individual carries on a trade alone, no valuation of the stock is required under this Chapter if the cessation is because of the individual's death.
174	Meaning of "trading stock"
	(1) In this Chapter "trading stock" means-
	(a) any property (whether land or other property) which is sold in the ordinary course of the trade or would be so sold if it were mature or its manufacture, preparation or construction were complete, or
	(b) materials used in the manufacture, preparation or construction of any property mentioned in paragraph (a).
	(2) In this Chapter "trading stock" includes also any services performed in the ordinary course of the trade-
	(a) the performance of which is wholly or partly completed at the time of the cessation, and
	(b) for which it would be reasonable to expect that a charge would be made if there were no cessation and, in the case of partly completed services, their performance were fully completed,
	and any article produced, and any material used, in the performance of any such services.
	(3) In this Chapter references to the sale or transfer of trading stock include the sale or transfer of any benefits and rights which accrue, or might reasonably be expected to accrue, from the performance of any such services.
175	Basis of valuation of trading stock
	(1) The value of trading stock belonging to the trade at the time of the cessation is determined as follows.
	(2) If the stock is sold to a person who-
	(a) carries on, or intends to carry on, a trade in the United Kingdom, and
	(b) is entitled to deduct the cost of the stock as an expense in calculating the profits of that trade for income or corporation tax purposes,
	the value is determined in accordance with section 176 (sale to unconnected person), 177 (sale to connected person) or 178 (election by connected persons).
	(3) But if section 127 (preventing abuse of the herd basis rules) applies-
	(a) the value is not determined in accordance with any of those sections, and
	(b) the value is instead taken to be that given by section 127 (the price which the animals transferred would have fetched if sold in the open market at the time of the sale).
	(4) In any other case, the value is taken to be the amount which the stock would have realised if sold in the open market at the time of the cessation.
176	Sale basis of valuation: sale to unconnected person
	(1) The value of trading stock is determined in accordance with this section if-
	(a) it is sold to a person who carries on, or intends to carry on, a trade in the United Kingdom and is entitled to deduct the cost of the stock as an expense in calculating the profits of that trade for income or corporation tax purposes, and
	(b) the buyer is not connected with the seller.
	(2) The value is taken to be the amount in fact realised on the sale.
	(3) If the stock is sold together with other assets, so much of the amount realised on the sale as, on a just and reasonable apportionment, is properly attributable to each asset is treated as the amount realised on the sale of that asset.
177	Sale basis of valuation: sale to connected person
	(1) The value of trading stock is determined in accordance with this section if-
	(a) it is sold to a person who carries on, or intends to carry on, a trade in the United Kingdom and is entitled to deduct the cost of the stock as an expense in calculating the profits of that trade for income or corporation tax purposes,
	(b) the buyer is connected with the seller, and
	(c) no election is made under section 178 (election by connected persons).
	(2) The value is taken to be the amount which would have been realised if the sale had been between independent persons dealing at arm's length.
178	Sale basis of valuation: election by connected persons
	(1) The value of trading stock is determined in accordance with this section if-
	(a) it is sold to a person who carries on, or intends to carry on, a trade in the United Kingdom and is entitled to deduct the cost of the stock as an expense in calculating the profits of that trade for income or corporation tax purposes,
	(b) the buyer is connected with the seller, and
	(c) an election is made under this section.
	(2) The parties to the sale may make an election under this section if the value of the stock determined under section 177 exceeds both-
	(a) its acquisition value, and
	(b) the amount in fact realised on the sale.
	(3) If an election is made, the value is taken to be-
	(a) its acquisition value, or,
	(b) if greater, the amount in fact realised on the sale.
	(4) An election under this section must be made by both parties on or before the first anniversary of the normal self-assessment filing date for the tax year in which the cessation occurred.
	(5) The "acquisition value" of trading stock means the amount which would have been deductible as representing its acquisition value, in calculating the profits of the trade, on the following assumptions-
	(a) that the stock had been sold in the course of the trade, immediately before the cessation, for a price equal to the value of the stock determined under section 177, and
	(b) that the period for which those profits were to be calculated began immediately before the sale.
	(6) If the stock is sold together with other assets, so much of the amount realised on the sale as, on a just and reasonable apportionment, is properly attributable to each asset is treated as the amount realised on the sale of that asset.
179	Connected persons
	For the purposes of sections 175 to 178 two persons are connected with each other if any of the following tests is met-
	(a) they are connected with each other within the meaning of section 839 of ICTA,
	(b) one of them is a firm and the other has a right to a share of the assets or income of the firm,
	(c) one of them is a body corporate and the other has control over that body,
	(d) both of them are firms and some other person has a right to a share of the assets or income of both of them, or
	(e) both of them are bodies corporate, or one of them is a firm and the other is a body corporate, and in either case some other person has control over both of them.
180	Cost to buyer of stock valued on sale basis of valuation
	(1) This section applies for the purpose of calculating the profits of the trade carried on by the buyer of trading stock.
	(2) If the value of the stock is determined in accordance with-
	(a) section 175(3) or sections 176 to 178 (sale basis of valuation), or
	(b) section 100(1A) to (1C) of ICTA (corresponding corporation tax rules),
	the cost of the stock to the buyer is taken to be the value as so determined.
181	Meaning of "sale" and related expressions
	(1) In sections 175 to 178 (except in section 178(5)) references to a sale include a transfer for valuable consideration.
	(2) In relation to a transfer which is not a sale-
	"amount realised on the sale" means the value of the consideration given for the transfer,
	"buyer" means the person to whom the transfer is made, and
	"seller" means the person who makes the transfer.
	Valuation of work in progress
182	Valuation of work in progress on cessation
	(1) If-
	(a) a person permanently ceases to carry on a profession or vocation, and
	(b) the work in progress is valued in calculating the profits of the profession or vocation,
	the value must be determined in accordance with section 184 (basis of valuation of work in progress) or 185 (election for valuation at cost).
	(2) If there is a change in the persons carrying on a profession, subsection (1) does not apply so long as a person carrying on the profession immediately before the change continues to carry it on after the change.
	(3) If an individual carries on a profession alone or a vocation, subsection (1) does not apply if the cessation is because of the individual's death.
183	Meaning of "work in progress"
	(1) In this Chapter "work in progress" means services performed in the ordinary course of the profession or vocation-
	(a) the performance of which is wholly or partly completed at the time of the cessation, and
	(b) for which it would be reasonable to expect that a charge would be made if there were no cessation and, in the case of partly completed services, their performance were fully completed,
	and includes any article produced, and any material used, in the performance of any such services.
	(2) In this Chapter references to the transfer of work in progress include the transfer of any benefits and rights which accrue, or might reasonably be expected to accrue, from the performance of any such services.
184	Basis of valuation of work in progress
	(1) If the work in progress is transferred for money or other valuable consideration to a person who-
	(a) carries on, or intends to carry on, a profession or vocation in the United Kingdom, and
	(b) is entitled to deduct the cost of the work as an expense in calculating the profits of that profession or vocation for income or corporation tax purposes,
	the value of the work is taken to be the amount paid or other consideration given for the transfer.
	(2) In any other case, the value of the work is taken to be the amount which would have been paid for a transfer of the work at the time of the cessation as between independent parties dealing at arm's length.
	(3) These rules are subject to any election under section 185 (election for valuation at cost).
185	Election for valuation at cost
	(1) The person who was carrying on the profession or vocation immediately before the cessation may elect that-
	(a) the value of work in progress brought into account in calculating the profits of the period immediately before the cessation is to be the actual cost of the work, and
	(b) the amount by which any sums received for the transfer of the work exceed the actual cost of the work is to be treated as a post-cessation receipt (see Chapter 18).
	(2) An election under this section must be made on or before the first anniversary of the normal self-assessment filing date for the tax year in which the cessation occurred.
	Supplementary
186	Determination of questions by Commissioners
	(1) Any question arising under-
	(a) section 175(3) or sections 176 to 178 (sale basis of valuation of trading stock), or
	(b) section 184(1) (valuation of work in progress transferred for valuable consideration),
	must be determined by the General or Special Commissioners in the same way as an appeal.
	(2) If the same General Commissioners have jurisdiction in relation to each of the persons whose trade, profession or vocation is concerned (including any company within the charge to corporation tax), the question must be determined by those Commissioners.
	(3) But this does not apply if all parties concerned agree that the question should be determined by the Special Commissioners.
	(4) In any other case, the question must be determined by the Special Commissioners.



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Prepared 29 March 2005


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