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CT returns for Not for Profit resident companies

I have a company set up purely to acquire and hold the freehold title purchased for the property I live in (there is one other tenant who has jointly acquired it via this company). The company was dormant until it acquired the freehold and that is the only transaction with nothing going through the P&L account.

My question is for CT purposes is this company still considered dormant as it is not for profit nor trading but simply has acquired the freehold asset on its balance sheet. Do I need to inform HMRC this company was active for this year and file a CT form or do I not need to inform them at all? After this set of accounts we expect the company to be dormant with all service charges, etc to remain outside of this company.

Any advice would be greatly appreciated.


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17th Jul 2012 13:35

Yes the company is still dormant

HMRC include as the definition of a dormant company "a company that will never be trading because it has been formed to hold an asset such as land or intellectual property".

If you have not already done so I would nevertheless write to your Corporation Tax Office to confirm that the company is dormant with no intention of ever being active to avoid a Notice to Deliver being issued.





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17th Jul 2012 13:53

Companies House & HMRC

Dormant means slightly different things to Companies House and HMRC.

For accounts purposes, your company will not be dormant in the accounting year in which it acquired the freehold, but may well be in subsequent years.  If it had reached its accounting date before acquiring the freehold, it could have filed the specialised dormant accounts form AA02 (was DCA), but in later years, although dormant, it will have to file proper accounts.

For tax purposes, the company does not come into the charge for corporation tax unless it starts trading.  Acquiring the freehold is not trading and there is therefore no requirement to register for CT, but HMRC might still send you a notice to file a return, depending on the response, if any, to the HMRC CT41G enquiry sent to all new companies.  However, if you write to them, they will mark the company as "dormant" which means that they will not even send the company a notice to file a return, subject to a review every 5 years.

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17th Jul 2012 14:08

i basically agree with the above but see this current link 



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By mlindup
17th Jul 2012 14:36

Thanks for your help guys much appreciated.

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