Close company surcharge trading options

Coote85

Registered User
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Hi all,

I am considering incorporating a ltd and start to trade options. I have prior experience btw. The question is, since this will be a close company, will there be a surcharge? Since the main trade is about money, the excess capital should not be considered for surcharge me thinks. Also, will the revenue consider what I do a trade? If they don’t there will be a surcharge for sure but then I would not incorporate and trade in my own name so that I would use remittance basis(as I am not domiciled) Any way to know where the revenue stands on the subject?
 
You have a surcharge if either you have investment income or professional service income. Whether a company has a trade of trading options or an investment activity is a difficult question and turns on a few factors. If you have a trade of trading options then the surcharge won't apply but it will if you have an investment activity. Look at the HMRC website on investing as a trading activity and it will give you a feeling for the issues to be considered.
Trading options and the remittance basis is also a difficult area and nothing simple about that. Why don't you consider using a non-resident company as it, by definition, is not a close company? However great caution needs to be exercised here as there is some very powerful and complex anti-avoidance provision that applies to such activities.

You probably need to engage a tax adviser with an interest/specialism background in financial services. Tax of itself is specialised and what you are considering is highly specialised.
 
Hi dublin67,

Thanks for answering my question. I have been told that offhore companies need “substance” , or else the revenue considers it void and taxes you as it does not exist. Can you confirm this?

Also i have unremitted capital gains from before. If i happen to incorporate and loan the money to the company(through offshore accounts) would it be deemed as remittance?

Thanks for all the help
 
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