Will my Flat Management Company pay Corporation Tax? 3

Many companies have been set up under the Right to Manage and manage Flat for Tenants.

Provided the following apply you probably won’t have to complete Corporation Tax Returns or pay Corporation Tax

  1. The only income received by the company are the service charges paid by the property owners.
  2. The income is expended on the day to day maintenance and management of the complex.
  3. Surplus income is transferred to deferred income for future maintenance expenses.
  4. No deposit interest is earned in the year.

The guidance on the HMRC website is as follows:

Tax for the limited company

You must send a Company Tax Return to HM Revenue & Customs (HMRC) no later than 12 months after the end of the company’s first financial year.

After you do this, HMRC may decide to treat your company as ‘dormant’ – this means that they wouldn’t expect your company to send Company Tax Returns for later years.

They may do this if your company does none of the following:

  • allow directors who aren’t residents or leaseholders to be appointed in its articles of association
  • does more than manage the property in the interests of shareholders
  • make a profit
  • need to pay more than £100 in Corporation Tax in a year
  • get any income from land
  • pay dividends or other payments from profits to shareholders
  • own any assets it is likely to dispose of which would give rise to a chargeable gain
  • make payments that need to be taxed

They will write to the company if they decide to treat it as dormant.

When the company must always send a Company Tax Return

Your company must send a Company Tax Return every year if:

  • HMRC doesn’t write to confirm they think the company is dormant

  • the company starts doing any of the things in the list above, even if HMRC has previously said the company is dormant

steve@bicknells.net

How many properties do I have for SDLT? Reply

Above is the diagram from Consultation

But what if you own properties in Companies and Partnerships (registered with HMRC with UTR’s)? Does that mean you own multiple properties?

I spoke to the HMRC SDLT Office about this and they said properties owned by other entities are not owned by an individual so shouldn’t count.

Phone

Call HMRC for help with Stamp Duty Land Tax queries.

Telephone:
0300 200 3510

Opening times:

8.30am to 5pm, Monday to Friday

 

We all want to get things right and follow the rules, so if you file an SDLT return you have 12 months to amend it and during that time you can write to HMRC and set out the exact circumstances, so if you have made a mistake it can be corrected.

The address to write to is

BT – Stamp Duty Land Tax
HM Revenue and Customs
BX9 1HD
United Kingdom

steve@bicknells.net