41.6 Double taxation and property held outside the partnership or company

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BUSINESSES vol 4(2) start-up, sale and purchase

41.6 Double taxation and property held outside the partnership or company

Copyright © 2025 LexisNexis

| Commentary

Running a business through the medium of a limited liability company may involve a certain element of double taxation. This can happen in two ways.

First of all, dividends, like any distributions made by a company, are not deductible expenses for the purposes of corporation tax¹. In other words, dividends are paid out of profits which have already been subject to tax. Tax is levied on a basic rate taxpayer

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(1) START-UP

42 Creating a separate legal personality

43 Types of company under the companies legislation

44 Private and public companies

45 Forming a bespoke company

46 Buying a ready-made company

47 Overview of the documents which must be provided

48 The memorandum of association

49.1 Delivery of the application

49.2 The company name

50.1 Overview

50.2 Statement of capital and initial shareholdings

50.3 Statement of proposed officers

51.1 Accommodating provisions previously contained in the memorandum

51.2 The three main approaches to drafting articles

51.3 Likely special articles

52 Statement of compliance

53 Registration

54 Documentation provided and procedure

55 The first board meeting

56 Changes to the company’s constitution