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As the loop of the tax noose tightens for many expatriates from the EU, N America and Australia, we are frequently asked ways to legally avoid the T word.
One such measure is the use of an offshore company but getting the structure right is critical. For example, the Inland Revenue (UK) would treat any company, no matter where incorporated, as tax resident in the UK if its management and control is deemed to be situated in the UK. Obviously, if somebody is the director of an offshore company and is operating that company from UK then the management and control is being exercised from UK and thus in the Revenue’s eyes make the company profits subject to UK tax.
How to overcome this issue is very important and for more info read
When dealing with clients based in high tax jurisdictions, we always advise them to take independent legal advice on their tax position and that they should consider using third party director services (Nominees). If third party directors are appointed who are resident in a non-taxable jurisdiction, and those directors are operating bank accounts, etc and holding the annual meetings offshore, then the company is obviously not being managed and controlled from the onshore jurisdiction. To back this up, a client should also consider entering into a consultancy agreement with the company, which might pay him a fixed salary to show that he is actually an employee rather than a director, etc.
Ultimately, it all boils down to exactly what the client is looking to achieve. Simply transferring assets into an offshore structure whilst based in the UK, for example, would not remove those assets from UK tax liability, unless proper steps were taken to decontrol those assets.
Many offshore jurisdicitons offer Nominee facilities like BVI, TCI and Belize. For those buying property in the UAE it should be noted that Jebel Ali Offshore companies have no Nominee facility and this should be taken into consideration when building your property portfolio. It is important for you to understand the uses of such structures as well so your Adviser can help with the right solution for your profile.
Ultimately, contact us for an overview on your circumstances and go to the Trust and Offshore Company sections of the site for more info. |
