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

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	CHAPTER 18
	POST-CESSATION RECEIPTS
	Introduction
241	Professions and vocations
	The provisions of this Chapter apply to professions and vocations as they apply to trades.
	Charge to tax on post-cessation receipts
242	Charge to tax on post-cessation receipts
	Income tax is charged on post-cessation receipts arising from a trade.
243	Extent of charge to tax
	(1) A post-cessation receipt is chargeable to tax under this Chapter only so far as it is not otherwise chargeable to income or corporation tax.
	(2) Accordingly, a post-cessation receipt arising from a trade is not chargeable to tax under this Chapter so far as it is brought into account in calculating the profits of the trade for any period.
	(3) A post-cessation receipt is not chargeable to tax under this Chapter if-
	(a) it is received by or on behalf of a non-UK resident who is beneficially entitled to it, and
	(b) it represents income arising outside the United Kingdom.
	(4) A post-cessation receipt is not chargeable to tax under this Chapter if it arises from a trade carried on wholly outside the United Kingdom.
	(5) A post-cessation receipt is not chargeable to tax under this Chapter in the case of a partner in a firm if-
	(a) it represents income arising outside the United Kingdom from a trade carried on by the firm, and
	(b) the partner's share of the firm's income arising out of the United Kingdom is treated as relevant foreign income by section 857(3) (partners to whom the remittance basis applies).
244	Income charged
	(1) Tax is charged under this Chapter on the full amount of the receipts received in the tax year.
	(2) This is subject to-
	(a) sections 254 and 255 (allowable deductions), and
	(b) section 257 (election to carry back).
245	Person liable
	The person liable for any tax charged under this Chapter is the person receiving or entitled to the receipts.
	Meaning of "post-cessation receipts"
246	Basic meaning of "post-cessation receipt"
	(1) In this Part "post-cessation receipt" means a sum-
	(a) which is received after a person permanently ceases to carry on a trade, and
	(b) which arises from the carrying on of the trade before the cessation.
	(2) For this purpose the reference to a person permanently ceasing to carry on a trade includes the occurrence of an event which under section 337(1) of ICTA is treated as the discontinuance of a trade.
	(3) Subsection (4) applies if-
	(a) a firm carries on a trade,
	(b) a person ceases to be a partner in the firm, and
	(c) the departure results in the partner permanently ceasing to carry on the notional trade (see section 852).
	(4) The partner is treated for the purposes of this Chapter as permanently ceasing to carry on the trade.
247	Other rules about what counts as post-cessation receipts
	(1) The following provisions treat certain amounts as post-cessation receipts for the purposes of this Part- section 82(6) (contributions to local enterprise organisations or urban regeneration companies), section 104(3) (distribution of assets of mutual concerns), section 109(2) (receipt by donor or connected person of benefit attributable to certain gifts), section 185(1) (election for valuation at cost), section 248 (debts paid after cessation), section 249 (debts released after cessation), as qualified, where appropriate, by section 48(4) (car or motor cycle hire), section 250 (receipts relating to post-cessation expenditure), section 251 (transfer of rights if transferee does not carry on trade), and section 844 (income charged on withdrawal of relief after source ceases: unremittable income).
	(2) Section 98 (acquisition of trade: receipts from transferor's trade) and section 251 (transfer of rights if transferee does not carry on trade) treat certain amounts as not being post-cessation receipts for the purposes of this Part.
	Sums treated as post-cessation receipts
248	Debts paid after cessation
	(1) Subsection (2) applies if, in calculating the profits of a trade for income or corporation tax purposes, a deduction is made in respect of a debt under-
	(a) section 35 (bad and doubtful debts), or
	(b) section 74(1)(j) of ICTA (corresponding corporation tax provision),
	and a person permanently ceases to carry on the trade.
	(2) A sum received after the cessation is treated as a post-cessation receipt so far as the deduction is made.
	(3) Subsection (4) applies if relief is given under section 109A(4) or (4A) of ICTA (relief for post-cessation expenditure) in respect of a debt owed to a person who has permanently ceased to carry on a trade.
	(4) A sum received by the person in payment of the debt is treated as a post-cessation receipt so far as relief is given in respect of the sum.
249	Debts released after cessation
	(1) This section applies if-
	(a) in calculating the profits of a trade for any period for income or corporation tax purposes, a deduction is allowed for the expense giving rise to a debt owed by the person who carried on the trade,
	(b) the person has permanently ceased to carry on the trade at or after the end of that period,
	(c) after the cessation, all or part of the debt is released, and
	(d) the release is not part of a statutory insolvency arrangement.
	(2) The amount released is treated as a post-cessation receipt.
	(3) For the purposes of this section the reference to a person permanently ceasing to carry on a trade includes the occurrence of an event which under section 337(1) of ICTA is treated as the discontinuance of a trade.
250	Receipts relating to post-cessation expenditure
	(1) This section applies if a person who has permanently ceased to carry on a trade makes a payment in circumstances where relief is available under section 109A of ICTA (relief for post-cessation expenditure).
	(2) The following sums are treated as post-cessation receipts-
	(a) in the case of a payment within section 109A(2)(a) or (b) of ICTA (payment to remedy defective work etc. or to defray expenses of a claim), the proceeds of insurance, or other sum received, for the purpose of enabling the payment to be made or by means of which it is reimbursed,
	(b) in the case of a payment within section 109A(2)(c) of ICTA (payment to insure against claims for defective work etc.), a refund of the premium, or other sum received, in connection with the insurance, and
	(c) in the case of a payment within section 109A(2)(d) of ICTA (payment for the purpose of collecting a debt), any sum received towards the cost of collecting the debt.
	(3) If a sum mentioned in subsection (2) is received in a tax year earlier than the tax year in which the related payment is made, it is treated as having been received in the later tax year (and not the earlier tax year).
	(4) Any adjustment required to give effect to subsection (3) is to be made by way of-
	(a) amendment of an assessment, or
	(b) discharge or repayment of tax.
251	Transfer of rights if transferee does not carry on trade
	(1) This section applies if-
	(a) a person ("the transferor") permanently ceases to carry on a trade,
	(b) the transferor transfers to another person ("the transferee") for value the right to receive sums arising from the carrying on of the trade, and
	(c) the transferee does not subsequently carry on the trade.
	(2) The transferor is treated as receiving a post-cessation receipt.
	(3) The amount of the receipt is-
	(a) the amount or value of the consideration for the transfer, if the transfer is at arm's length, or
	(b) the value of the rights transferred as between parties at arm's length, if the transfer is not at arm's length.
	(4) Any sums mentioned in subsection (1)(b) which are received after the cessation of the trade are not post-cessation receipts.
	(5) This section is subject to-
	(a) section 252 (transfer of trading stock or work in progress), and
	(b) section 253 (lump sums paid to personal representatives for copyright etc.).
	Sums that are not post-cessation receipts
252	Transfer of trading stock or work in progress
	(1) When a person permanently ceases to carry on a trade, a sum realised by-
	(a) the transfer of trading stock, or
	(b) the transfer of work in progress,
	is not a post-cessation receipt if a valuation of the stock or work is brought into account in accordance with Chapter 12 (valuation of stock and work in progress).
	(2) This does not prevent a sum from being treated as a post-cessation receipt as a result of an election under section 185 (election for valuation of work in progress at cost).
	(3) In this section-
	(a) "trading stock" has the meaning given by section 174, and
	(b) "work in progress" and "transfer of work in progress" have the meaning given by section 183.
253	Lump sums paid to personal representatives for copyright etc.
	(1) A lump sum which is paid to the personal representatives of the author of a literary, dramatic, musical or artistic work as consideration for the assignment by them of-
	(a) the copyright in the work, or
	(b) the public lending right in the work,
	is not a post-cessation receipt.
	(2) A lump sum which is paid to the personal representatives of the designer of a design in which design right subsists as consideration for the assignment by them of that right is not a post-cessation receipt.
	(3) For the purposes of this section it does not matter whether the whole or a part of the right is assigned.
	Deductions
254	Allowable deductions
	(1) In calculating the amount on which tax is charged under this Chapter, deductions are allowed in accordance with-
	(a) this section, and
	(b) section 255,
	from the amount which would otherwise be chargeable to tax under this Chapter.
	(2) A deduction is allowed for a loss, expense or debit which, if the person carrying on the trade had not permanently ceased to do so-
	(a) would have been deducted in calculating the profits of the trade for income or corporation tax purposes, or
	(b) would have been deducted from or set off against the profits of the trade for income or corporation tax purposes,
	but no deduction is allowed if the loss, expense or debit arises directly or indirectly from the cessation itself.
	(3) No deduction for an amount is allowed under this section if the amount has been allowed-
	(a) under any other provision of the Tax Acts, or
	(b) as a result of section 90(4) of FA 1995 (capital gains tax relief for post-cessation expenditure).
255	Further rules about allowable deductions
	(1) An amount may not be deducted more than once under section 254.
	(2) A deduction under that section of a loss must be made from post-cessation receipts charged for an earlier tax year in preference to those charged for a later tax year.
	(3) But this does not authorise the deduction of a loss from post-cessation receipts charged for a tax year before the tax year in which the loss is made.
	(4) No deduction may be made under section 254 from any amount that is treated as a post-cessation receipt under-
	(a) section 248(4) (debts paid after cessation), or
	(b) section 250 (receipts relating to post-cessation expenditure).
	Reliefs
256	Treatment of post-cessation receipts
	(1) This section applies if-
	(a) an individual has permanently ceased to carry on a trade, and
	(b) the income arising to the individual from the trade was earned income within section 833(4)(c) of ICTA or relevant UK earnings within section 189(2)(b) of FA 2004.
	(2) Any post-cessation receipts arising to the individual from the trade are similarly earned income or relevant UK earnings.
257	Election to carry back
	(1) This section applies if a post-cessation receipt is received by a person (or a person's personal representatives) in a tax year beginning no later than 6 years after the person permanently ceased to carry on the trade.
	(2) The person (or the person's personal representatives) may elect that the tax chargeable in respect of the receipt is to be charged as if the receipt had been received on the date of the cessation.
	(3) But this is subject to paragraph 5 of Schedule 1B to TMA 1970 (election given effect in the tax year in which the receipt is actually received).
	(4) The election must be made on or before the first anniversary of the normal self-assessment filing date for the tax year.



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Prepared 29 March 2005


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