Both for resident natural persons as well as legal persons, the tax system is based on the criteria of world revenue.

Taxation of Individuals

Personal income tax for individuals is defined by bands and normally ranges from 0% to 45%, according to the volume of revenue received during the financial year.

There are particular tax rates such as, for example, yield from capital gains, that are taxed at a fixed rate of 18%.

Taxation of Corporate Entities

The general company tax rate is 20%.

The general Value Added Tax (VAT) rate is 20%.

Other Taxes

At the level of other taxes, we may distinguish the following:

• Property tax (real estate) Property conveyance of a first home is generally taxed at a rate from 0% to 12% according to the value of the property. The tax rates for second homes, or those not used for habitual abode, range from 0% to 4%.

• Inheritance tax: It ranges from 4% to 40% according to the taxable amount.

• Wealth tax There is none.

There are withholdings on payment of interest and royalties for non residents, which are at a rate of 20%, unless there is a Double Taxation Convention between the parties acting that amend the tax rate aforementioned, or when the relevant European directives are applied.

Features of the Main Types of Companies

There are now several types of companies in the United Kingdom , the most common being Private Limited Liability Companies (Ltd) and Limited Liability Partnerships (LLP).

Ltd companies are highly flexible companies both in terms of shareholders (minimum 1) as well as directors. While the office of shareholder may be held by resident or foreign natural or legal persons, only a natural person, either resident or non resident, may hold office as director. On the contrary, for LLPs, the minimum number of members to form the partnership must be 2, while there are no limitations on the office of director.

With regard to stock capital, there is no minimum value.

With regard to accounting obligations, both Ltd companies as well as LLPs must prepare annual financial accounts, although in the case of LLPs, it shall be interpreted that the activities from which corporate income is obtained is performed by the partners. Thus, a LLP is considered a "tax transparent company".