Discussion
There have been similar threads but with little detail, and having spent a few hours in the Glaswegian sun today with someone who is doing it, I wondered if the accounting cognoscenti would like to immediately find flaw with this as it sounds far too good to be true to me:
-IT consultant and wife making a killing through a conventional Ltd co, usual service provider where it's your time exchanged for money, very few overheads, rates of 15-1800/ day
-After some sort of webinar, pays to establish a new Ltd in Gibraltar. A "Non Resident Company".
-Initial invoices are now to Gib. None of the payors care, it's just new bank details.
-0% corp tax on income not derived from Gibraltar with one of these structures.
-Small invoices to the Gib co from existing Ltd, so does receive some money and pay UK tax on that. "Looks like" either subbing or an umbrella co.
The cash was building up in the UK Ltd anyway but now the claim is it's doing the same, but is free of tax.
Surely this is going to come unstuck pretty quickly???
And there's still the matter of extracting itz which surely if repatriated is just taxed anyway.
Just sounds like a lot of snake oil...
-IT consultant and wife making a killing through a conventional Ltd co, usual service provider where it's your time exchanged for money, very few overheads, rates of 15-1800/ day
-After some sort of webinar, pays to establish a new Ltd in Gibraltar. A "Non Resident Company".
-Initial invoices are now to Gib. None of the payors care, it's just new bank details.
-0% corp tax on income not derived from Gibraltar with one of these structures.
-Small invoices to the Gib co from existing Ltd, so does receive some money and pay UK tax on that. "Looks like" either subbing or an umbrella co.
The cash was building up in the UK Ltd anyway but now the claim is it's doing the same, but is free of tax.
Surely this is going to come unstuck pretty quickly???
And there's still the matter of extracting itz which surely if repatriated is just taxed anyway.
Just sounds like a lot of snake oil...
Specifically because of what though?
Anyone can open a company in that manner it seems, Gib basically being entirely happy to host. So that's not illegal.
Any business can charge. And apparently it will hold the brand and a registered set of trade marks so perhaps there is some element of transfer pricing. So that's not illegal.
My reason for making the OP was to find out the why, hence I asked, and perhaps I wasn't clear enough:
And I'd love to know, as it stinks, but why?
Anyone can open a company in that manner it seems, Gib basically being entirely happy to host. So that's not illegal.
Any business can charge. And apparently it will hold the brand and a registered set of trade marks so perhaps there is some element of transfer pricing. So that's not illegal.
My reason for making the OP was to find out the why, hence I asked, and perhaps I wasn't clear enough:
macron said:
I wondered if the accounting cognoscenti would like to immediately find flaw with this as it sounds far too good to be true to me:
Just saying "he shouldn't do it" doesn't explain what specifically is wrong with it. And I'd love to know, as it stinks, but why?
macron said:
Just saying "he shouldn't do it" doesn't explain what specifically is wrong with it.
And I'd love to know, as it stinks, but why?
Because if he's a UK tas resident running the company from the UK and operating within the UK he would need to inform HMRC and account for the business as if it was a UK business.And I'd love to know, as it stinks, but why?
So there's no advantage to be gained.
Right, think I have the magic bullet. Might be wrong, it seems.some offshore things are ok, and suspect the "advisors" have some sort of wheeze where they think they're sidestepping this, probably with some sort of pretend role they assign themselves in the apparent business.
https://assets.publishing.service.gov.uk/media/5a7...
https://assets.publishing.service.gov.uk/media/5a7...
Wouldn't you just replicate what the major companies do.
Have 2 companies, one offshore eating all the profits, and one on shore earning just enough to take equivalent to the most tax efficient for your everyday needs?
Presumably the issue is the pile of money mounting up offshore becomes taxable if you then try and bring it into the country.
Have 2 companies, one offshore eating all the profits, and one on shore earning just enough to take equivalent to the most tax efficient for your everyday needs?
Presumably the issue is the pile of money mounting up offshore becomes taxable if you then try and bring it into the country.
mikebradford said:
Wouldn't you just replicate what the major companies do.
Have 2 companies, one offshore eating all the profits, and one on shore earning just enough to take equivalent to the most tax efficient for your everyday needs?
Presumably the issue is the pile of money mounting up offshore becomes taxable if you then try and bring it into the country.
If you are a UK tax resident it's taxable before you move it into the country Have 2 companies, one offshore eating all the profits, and one on shore earning just enough to take equivalent to the most tax efficient for your everyday needs?
Presumably the issue is the pile of money mounting up offshore becomes taxable if you then try and bring it into the country.
TownIdiot said:
mikebradford said:
Wouldn't you just replicate what the major companies do.
Have 2 companies, one offshore eating all the profits, and one on shore earning just enough to take equivalent to the most tax efficient for your everyday needs?
Presumably the issue is the pile of money mounting up offshore becomes taxable if you then try and bring it into the country.
If you are a UK tax resident it's taxable before you move it into the country Have 2 companies, one offshore eating all the profits, and one on shore earning just enough to take equivalent to the most tax efficient for your everyday needs?
Presumably the issue is the pile of money mounting up offshore becomes taxable if you then try and bring it into the country.
Live of a small basic income declared in the UK
Then retire abroad.
At the point of moving abroad access the offshore money as your not bringing it into the UK
mikebradford said:
Could you not in theory let the money pile up offshore, over a number of years.
Live of a small basic income declared in the UK
Then retire abroad.
At the point of moving abroad access the offshore money as your not bringing it into the UK
If you are a UK tax resident you'd still be expected to declare the income into the offshore company and be taxed on it.Live of a small basic income declared in the UK
Then retire abroad.
At the point of moving abroad access the offshore money as your not bringing it into the UK
If you did it for a few years then legged it never to return it's difficult to see what they would be able to do. But it would still be against the rules.
In the vast majority of cases it's very difficult to successfully utilise an offshore company in this way if you are a UK tax payer who lives and works in the UK.
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