It is acceptable for a shareholder to nominate someone else to hold their shares, if the company’s articles allow it (Section 145 Companies Act 2006). Therefore, a shareholder could nominate someone to attend and vote at meetings in their place, or they could nominate a relative to receive their dividends if they wish. However, the nomination rights are restricted, in that shareholders cannot delegate the power to enforce any of their rights against the company or to transfer their shares.
In these situations, the share’s legal interest is held by the nominee, while its beneficial interest is held by the investor.
There would normally be a Declaration of Trust between the Nominee and the Owner.
The ‘legal owner’ is shown as the nominee on the register of shareholders, attends shareholders meetings and votes, the ‘beneficial owner’ is hidden provided they don’t own more than 25% or have significant control over the board, otherwise they would need to have their details disclosed on the PSC register.
Nominee shareholders can be useful for investors who want professionals to manage their investment, they can then delegate authority to the Nominee to make decisions on their behalf.
The Beneficial Owner will be taxed in the normal way on dividends and capital gains.
The Autumn Budget was on Wednesday 22nd November 2017 and the main tax changes are
- The Personal Allowance will be increased to £11,850 for 2018/19 (from £11,500)
- The Higher Rate 40% band will start from £46,350 for 2018/19 (from £45,000)
- VAT limits frozen for 2 years
- Dividend allowance to be reduced to £2,000 for 2018/19
- CGT annual exemption to be increased to £11,700 from £11,300
Stamp Duty (SDLT) removed for First Time Buyers
The relief works as follows:
- consideration < £300,000 then no SDLT
- consideration >= £300,001 and <= £500,000 then no SDLT of first £300,000 and 5% SDLT on the balance
- consideration > £500,000 then no relief
The relief applies to transactions on or after 22nd November 2017
A first time buyer is ‘an individual or individuals who have never owned an interest in a residential property in the UK or anywhere else in the world and who intends to occupy the property as their main residence’
Business Rates and the ‘StaircaseTax’
£2.3 billion of support has been announced.
- Indexation is being switched from RPI to CPI
- Retrospective legislation will address ‘staircase tax’ and affected businesses will be able to ask the valuations office to recalculate valuations
- Pubs will continue to get £1,000 discount up to a rateable value of £100,000
- VOA will revalue every 3 years
An extra £3 billion to prepare for Brexit over the next two years
The money will make sure the government is ready on day 1 of exit. It will include funding to prepare the border, the future immigration system and new trade relationships.
£6.3 billion of new funding for the NHS
£3.5 billion will be invested in upgrading NHS buildings and improving care.
£2.8 billion will go towards improving A&E performance, reducing waiting times for patients, and treating more people this winter.
The Office for Budget Responsibility slashed its 2017 growth forecast from 2% to 1.5%.
Output, it added, would be weaker than previously thought in each of the subsequent four years.
On the 15th December 2017 you will no longer be able to pay tax at any Post Office Branch, fantastic timing! just in time for the January self assessment payment rush
The contract with Santander which allowed this method of payment expires on that date and Santander and HMRC have not reached agreement on a new contract.
To make things worse from the 13th January 2018 you won’t be able to pay by Credit Card either!
So your options will be
- Debit card
- Online Banking
- Cheque in the Post
- Direct Debit
These changes are likely to come as shock to many taxpayers and any reduction in ways to pay can only be bad news for taxpayers!
In a company Capital Gains and Trading activity are both taxed at Corporation Tax Rates.
The downside to holding CryptoCurrency as an investment is that if you have a trading company it could put your trading status at risk for entrepreneurs relief if more that 20% of the business becomes investment related.
The best known Virtual Currency is Bitcoin and since 2014 there have been calls for tighter control of these currencies.
The European Banking Authority, the EBA, called on national supervisory authorities to discourage banks and credit institutions from buying, holding or selling virtual currencies. It called for regulation of market participants at the interface between conventional and virtual currencies. Over the longer-term, the EBA is calling for a ‘substantial body’ of regulation to be applied to virtual currency market participants, including the creation of ‘scheme governing authorities’ accountable for the integrity of a virtual currency scheme and the imposition of capital requirements. In the short term, the EBA is calling for national authorities to ‘shield regulated financial services from virtual currencies’.
Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part.
We generally recommend creating a holding company to hold property investing companies as it helps to centralise management and can give guarantees to lenders.
Many business owners have a concern that if the holding company receives dividends from subsidiaries that they will be double taxed, once in the subsidiary (before paying dividends) and then on the profit in the holding company when in receives the investment income (dividends). This would be madness!
Dividends paid to UK Holding Companies are normally exempt from Corporation Tax.
A distribution made by a UK resident company and received by a UK resident company is generally not included in the recipient company’s CT profits. Similarly, such a distribution received by a non-UK resident company trading through a UK permanent establishment is not generally included in the CT profits of that permanent establishment. However, the way in which distributions received by companies are treated for tax purposes changed from 1 July 2009:
- Until 1 July 2009, ICTA88/S208 (and for a brief period CTA09/S1285) provided that corporation tax was not chargeable on distributions from UK resident companies.
- From 1 July 2009, the way in which distributions from UK resident companies are taxed was aligned with the treatment of distributions from non-UK companies in CTA09/S931A. (Previously, distributions from non-UK resident companies were charged to corporation tax as income from foreign possessions under ICTA88/S18, that is, under Case V of Schedule D). CTA09/S931A charges distributions from UK and non-UK resident companies to corporation tax, but then exempts these from charge in most cases. In practice, this means that most distributions – UK and non-UK sourced – are not chargeable to corporation tax unless these form part of avoidance arrangements.
If you thought you were going to pay your tax bill with a personal credit card in January 2018, then think again!
EU rules are forcing HMRC to change their policy in January.
You won’t be able to pay with a personal credit card from 13 January 2018.
This change was instigated by the Second Payment Services Directive (PSD2), which outlined that there could be no onward charging consumers for credit or debit cards. This includes HMRC who have said that they cannot absorb the costs of the merchant providers for credit card facilities and therefore no payments will be taken by credit card. Debit cards payments will still be possible, as the underlying costs are not as high.
This is happening at the peak of self assessment time! so it will be a nightmare for tax payers