using a uk ltd to fund an eu27 ltd venture

[simes]

took me a while to figure out what a socky is.

Well, I must admit I am still none the wiser as to what a socky is... Can you help?

[northernladuk]

Well, I must admit I am still none the wiser as to what a socky is... Can you help?

Google 'Sockpuppet'

[meridian]

I suspected the answer would be along these lines. I've checked in with my accountant (who in turn is checking in with their in house tax person) just in case there is a legit way to do this but my own googling and concise answers like yours are making me think i'll need to forget my dreams of tax efficiency and take the dividend tax hit.

On the property in a ltd point, i started looking into that as a way to keep claiming my mortgage interest as an expense on a uk rental property I own. This time around it was on the off chance I could transfer money between companies without tax to fund a purchase outside of the UK, but with that looking unlikely for the reasons you've presented i'll certainly consider the pros of making it a personal purchase rather than a ltd co one.

Thanks for the helpful answer.

If immediate timing isn't the issue (you mentioned you may need to leave the UK) then simply closing the company down and claiming ER before you leave might be another option.

[simes]

Google 'Sockpuppet'

Ah. Got it. Ta.

[m0n1k3r]

Hi all

There's a good chance I'll be forced to move to one of the EU27 countries post brexit due to my mum being here as a family member of an EEA national but likely not long enough to meet the settled status. As such I'm making plans to move business-ey stuff to the EU as much as possible so that moving life-ey stuff is less painful.
I have about £50k in my uk LTD that I'd like to use to fund an EU27 ltd to buy an investment property, ideally without turning it into dividends and paying tax first. I would also like to do something similar for an EU27 consulting ltd but that needs a lot less money so I could fund with a directors loan, i'm less bothered about that one, it's the property one I'm really hoping to fund directly from my uk consulting ltd.

So my questions. What is the most tax efficient (and of course totally tax legal, this is not a tax dodge, it's a brexit dodge) way to fund a new eu27 ltd property investment co from a uk consulting ltd? Is that even possible? I'm up for anything, redomiciling my uk ltd, an EU27 holding and waiting 2 years to pay dividends without withholding tax, whatever.
My Estonian e-residency will be with me in the next 2 weeks or so, is that the best way to open an EU27 company? I'm a Dutch citizen so maybe there's other better options?

Setting up a company in Estonia is quick and easy, but in order to set up a company bank account there you would probably have to rent an apartment there in order to convince the banks that they company is indeed based and run from Estonia. Pretty much the same as for any country these days.

The Netherlands also made changes to their company laws a while back so that it is far simpler and cheaper to set up a small company there. You'll still have to go through a notary, though.

Germany now also have their 'UG' company form, but accounting and notary fees in Germany can easily get more expensive than elsewhere. Pretty much everything in Germany is still done on paper.

Ireland is also an alternative, but in order to not have to provide a bond, you'll have to provide an EU-based address. Also bear in mind that corporation tax in Ireland can get quite high for non-trading profits (e.g. 25% or 33% rather than the 12.5% that only applies to trading profits). The authorities are however quite easy and friendly to deal with.