United Kingdom Tax Guide

United Kingdom

Currency: Pound Sterling

Foreign Exchange Control: None

Accounting Principles: UKGAAP/IAS. Financial statements filed annually.

Business Facilities: Principally, public and private limited liability company, limited liability partnership, limited partnership, partnership, Real Estate Investment Trust, branch of a foreign corporation.

Corporate Taxation

Residence: If incorporated in the UK or place of central management and controlled in the UK.

Basis: Residents are taxed on worldwide profits and gains although permanent establishments of a resident company may be excluded. Non-residents are taxed on UK-source profits, interest and gains.

Rate: Currently 21% (reducing to 20% from 1 April 2015) small profits rate 20%.

Foreign Tax: A tax credit is given against overseas tax.

Other: Enhanced tax deduction for certain R&D expenditure. There are also reduced tax rates on profits attributable to qualifying patents.

Tax Year: The shorter of 12 months or the period of accounts

Personal Taxation

Residence: If resident and domiciled then taxed on worldwide income and gains. Different treatment may apply if resident but not domiciled (residency test applied, domiciled based on parents domicile or by making an election)

Rate: Progressive up to 45%

Capital Gains: Taxed on amounts above the annual allowance of £10,900

Other: Stamp duty: 0.5% on shares. Stamp Duty Land Tax charged on transfers of UK real property.

Real property: Council tax on domestic properties and business rates on business premises.

Inheritance tax: 40% on assets over £325,000

Social Security: Employers 13.8% and employees 12%. Employees drops to 2% on income over a certain value.

VAT: Standard rate 20%

Member Firm: SRLV

Marc Voulters: Voulters@srlv.co.uk