Ireland / Cyprus Offshore Company Ideas - My Funds Not Needed

[DeludedAussie]

Imagine for a minute that your agency would pay to an offshore company

Also imagine that you dont need to bring back any of the funds as you have plenty of savings and no need for funds.

Is it effective to actually operate through a company with a low tax corporation rate and draw a 5K salary and nothing else

I read with fascination this thread http://forums.contractoruk.com/accou...ned-manco.html which dealt with dividends being paid

In general if you dont need the funds can you operate through an offshore ltd company and is that tax efficent?

[ASB]

Imagine for a minute that your agency would pay to an offshore company

Also imagine that you dont need to bring back any of the funds as you have plenty of savings and no need for funds.

Is it effective to actually operate through a company with a low tax corporation rate and draw a 5K salary and nothing else

I read with fascination this thread http://forums.contractoruk.com/accou...ned-manco.html which dealt with dividends being paid

In general if you dont need the funds can you operate through an offshore ltd company and is that tax efficent?

Incorporate in one of the zero tax jurisdictions. You can always intersperse a uk ltd in the chain to get round any agency payment issues.

Jobs a good 'un except for:-

1/ HMRC may decide company is UK resident and seek to tax it accordingly
2/ At some point you need to get the money. If you are UK resident at the time it can be difficult.

However given your handle you may well not be UK domiciled. There may well be easier opportunites for you. If you want to persue talk to a speciailist. The only advice that is likely to work will be highly dependant upon your exact circustamces.

[BlasterBates]

It doesn´t matter where the company is originally registered, if it does business in the UK then that the foreign company needs to be registered in the UK and will be taxed, on those activities. The fact that you´re resident in the UK and you´re doing your work there will mean that is how HMRC will classify you. So if they find out they will come after you.

[DeludedAussie]

It doesn´t matter where the company is originally registered, if it does business in the UK then that the foreign company needs to be registered in the UK and will be taxed, on those activities. The fact that you´re resident in the UK and you´re doing your work there will mean that is how HMRC will classify you. So if they find out they will come after you.

Thats not clear at all - How would offshore companies ever work in that case

[DeludedAussie]

Incorporate in one of the zero tax jurisdictions. You can always intersperse a uk ltd in the chain to get round any agency payment issues.

Jobs a good 'un except for:-

1/ HMRC may decide company is UK resident and seek to tax it accordingly
2/ At some point you need to get the money. If you are UK resident at the time it can be difficult.

However given your handle you may well not be UK domiciled. There may well be easier opportunites for you. If you want to persue talk to a speciailist. The only advice that is likely to work will be highly dependant upon your exact circustamces.

Thanks - Top post

Any idea on a specialist?

I mean there must have be people on this board running through offshore companies or who have carefully looked at this in detail

[ASB]

Thanks - Top post

Any idea on a specialist?

I mean there must have be people on this board running through offshore companies or who have carefully looked at this in detail

The guy I used has sadly passed on. If you are proposing to use this route then you should take head of BB's comments. I personally think he overstates the position - but not by very much.

I can't find the relevant info on HMRC about non uk companies becoming resident for tax purposes. However:-

Individual Non-UK Resident Taxation. Capital Gains Tax. Starting Business In The United Kingdom

Of particular note:-

Companies incorporated in the United Kingdom are UK resident for tax purposes. Companies incorporated outside the UK are UK resident for tax purposes if their central management and control is exercised in the UK. The place where the central management and control of a company is exercised has been determined under English law by reference to where its board of directors exercise their control, which is not necessarily where they meet. It is a question of fact in each case where the central management and control is exercised.

It is likely to be very difficult for you to establish (even if you are not a director) that the company is not managed and controlled from the UK. As I said previously it will all depend upon your circumstances.

[DeludedAussie]

It is likely to be very difficult for you to establish (even if you are not a director) that the company is not managed and controlled from the UK. As I said previously it will all depend upon your circumstances.

Thanks - To be clear even if I set someone else up as a director in the company and was simply an employee of said company HMRC will still view this as a UK company? Even if i dont own any shares and it is owned by brother / sister?

[ASB]

Thanks - To be clear even if I set someone else up as a director in the company and was simply an employee of said company HMRC will still view this as a UK company? Even if i dont own any shares and it is owned by brother / sister?

It's not about ownership, directorship or whatever, it's about control. Assuming you are a UK based individual, negotiating the contracts the company enters into then I think you would have a hard job convincing HMIT you are not in control and that is likely to mean the company is UK based and taxed as such. Whether or not HMIT will ever catch on is a different matter - but they probably will sooner or later and that is likely to mean big trouble.

It is for this reason you need to talk to a specialist bearing in mind your exact circumstances.

If it were easy and secure then everybody would be doing it wouldn't they!

[BlasterBates]

Thats not clear at all - How would offshore companies ever work in that case

Most of them don't, not in the end. You'll find a huge number of contractors that found out the hard way.

The only way it works is if you manage to hide it from the taxman, if they don't know and its obscure you'll get away with it.

Read the BN66 thread. Montpelier was a major player in tax avoidance, they're now pulling out of it altogether.

Thousands of contractors have been caught out around Europe from offshore schemes. I know one or two personally.The "thousands" is no exaggeration. Some, the minority I suspect, get away with it, but that's only because the taxman doesn't find out. One colleague was on a scheme 10 years ago, all the others on it got busted, but he didn't stay in it that long and it is probably too long ago now.

If you do it, go in there with your eyes open, you stand to lose everything if it doesn't work out. But make no mistake, if HMRC does find out they'll go after you.

If you are going to do this, you do your own thing, then you're less likely to get targeted. One contractor I know just stayed in hotels and didn't register with the tax authorities. This is tax evasion, but you're far more likely to get away with it, than when you start declaring earnings in a tax haven on your tax form.

Of course you maybe lucky and have a construct that after a few years in court battles with the HMRC maybe deemed to be legal. But that's the only way you'd find out.