dear Kimberly, I was struggling with this whole concept, who, what, where, I did not get it before you have explained it. Finally it all clicked. Thanks a lot. God bless.
Thank-you so much. I am a new subscribers today. I have a 1 year company and received the CT61 in post. I do not have any investor interest to pay. Do I still fill using Zero and return form. Thankyou.
You only need to complete the form if you have something to report. If it is zero then you have nothing to do until you make a payment in a quarter to an investor.
Hi Kimberly, asking here as a owner operator of a ltd co. I am looking into this for tax saving benefits. If business has earnt £150 interest, and paid out £1000 interest to director. Do they pay corporation tax on the £150 interest or does it get offset? As a director - personal tax return point of view. Does the £1000 interest earned count towards the directors Personal Savings allowance which entitles an individual to earn £1000 interest tax free each year?
Yes the £150 is taxable however the £1000 would be an allowable expenses so would reduce the tax payable. So it would be the net. The £1000 would go towards the savings allowance for the year and need reporting on the personal tax return.
Hello Kimberley, My company received a C61 return forms from HMRC. The company is still new with no trading records, should I complete it and return it or I should ignore it.
Hi Kimberly. This is really helpful. I need to pay interest to an investor who is resident in Ireland. Does the same apply? I am trying to explain the process to them but I am not sure of the tax agreements between ireland and uk. The irish investor is a higer rate taxpayer. What will they need to do to avoid paying the full rate of tax on whats transferred after I deduct 20% and pay to HMRC on CT61? Any advice would be much appreciated. Glen.
As far as I am aware the same applies and it will be dependent on the double taxation agreement in place with Ireland on how it works through for them. They will likely have to pay additional tax having already paid UK tax thats been deducted. I would suggest you speak to your accountant to get full details and the investor speaks to their accountant to ensure it tracks through on their side of things.
Hi Kimberley. I am lending cash (64000) to a Ltd company that buys houses, renovates them and resells at a profit. They then pay me back with interest of 7.5% over 4 months. I live in The Netherlands for 9 months of each year and I'm registered as a resident for tax purposes. Does the company have to complete a CT61?
The guidance says: Interest and Royalties paid to nonresidents are sometimes charged to Income Tax at a reduced rate, as specified by the double taxation treaty relevant to the residence of the payee. A notice under the terms of SI1970/488 authorising this treatment must first be obtained from the HMRevenue&Customs Residency. Enter the gross amount of such interest or royalties in box 3 and the amount of tax deducted in box 4 on the CT61 Return. I would therefore check what rates should be used and arrange for the approval to be obtained to reduce the rate as appropriate. A CT61 should still be done however with the above amendments.
dear Kimberly, I was struggling with this whole concept, who, what, where, I did not get it before you have explained it. Finally it all clicked. Thanks a lot. God bless.
Your welcome.
Awesome work Kimberley , very informative
Glad it was helpful!
Good video. Well explained
Thank you!
Liked & Subscribed! Thank you for the video!
Thanks for the sub!
Thank-you so much. I am a new subscribers today. I have a 1 year company and received the CT61 in post. I do not have any investor interest to pay. Do I still fill using Zero and return form. Thankyou.
You only need to complete the form if you have something to report. If it is zero then you have nothing to do until you make a payment in a quarter to an investor.
Hi Kimberly, asking here as a owner operator of a ltd co. I am looking into this for tax saving benefits.
If business has earnt £150 interest, and paid out £1000 interest to director. Do they pay corporation tax on the £150 interest or does it get offset?
As a director - personal tax return point of view. Does the £1000 interest earned count towards the directors Personal Savings allowance which entitles an individual to earn £1000 interest tax free each year?
Yes the £150 is taxable however the £1000 would be an allowable expenses so would reduce the tax payable. So it would be the net.
The £1000 would go towards the savings allowance for the year and need reporting on the personal tax return.
Hello Kimberley,
My company received a C61 return forms from HMRC. The company is still new with no trading records, should I complete it and return it or I should ignore it.
If there is nothing to report then no form needs to be submitted.
Thank you Kimberly 😊
Can an individual pay such interest to a company suing this method?
Yes. However these regulations only apply to when a company pays interest to an individual.
Hi Kimberly. This is really helpful.
I need to pay interest to an investor who is resident in Ireland. Does the same apply? I am trying to explain the process to them but I am not sure of the tax agreements between ireland and uk.
The irish investor is a higer rate taxpayer.
What will they need to do to avoid paying the full rate of tax on whats transferred after I deduct 20% and pay to HMRC on CT61?
Any advice would be much appreciated.
Glen.
As far as I am aware the same applies and it will be dependent on the double taxation agreement in place with Ireland on how it works through for them. They will likely have to pay additional tax having already paid UK tax thats been deducted. I would suggest you speak to your accountant to get full details and the investor speaks to their accountant to ensure it tracks through on their side of things.
Hi Kimberley. I am lending cash (64000) to a Ltd company that buys houses, renovates them and resells at a profit. They then pay me back with interest of 7.5% over 4 months. I live in The Netherlands for 9 months of each year and I'm registered as a resident for tax purposes. Does the company have to complete a CT61?
The guidance says:
Interest and Royalties paid to nonresidents are sometimes charged to Income Tax at a reduced rate, as specified by the double taxation treaty relevant to the residence of the payee. A notice under the terms of SI1970/488 authorising this treatment must first be obtained from the HMRevenue&Customs Residency. Enter the gross amount of such interest or royalties in box 3 and the amount of tax deducted in box 4 on the CT61 Return.
I would therefore check what rates should be used and arrange for the approval to be obtained to reduce the rate as appropriate. A CT61 should still be done however with the above amendments.
An accountant should know his/her figures! This video is pretty embarassing :(