Forex Day Trader/nomad IB advice

[Johno]

Hi guys,\\

Ive been doing some research and reading this forum. Im new to IBC’s and the world of offshore. I have a few questions based on my specific situation. I would really appreciate any answers of people in similar situations.

If anyone can point me in the direction of any good resources where I can get an understanding of the offshore world, I would appreciate that too!

Here we go:

I am a forex day trader. I trade spot currencies, metals, indices and crypto currencies on a short term basis (A day trader). In the near future I will have trading capital of £10,000. I am looking to set up an entity ‘offshore’ to ensure that I am LEGALLY reducing my tax obligation as much as possible.

I am a UK resident, I was born here and currently live here. From November this year, I will be living in Canada for 6 months, then Australia for 6 months and then Japan for 6 months, and continually moving to new countries and living for 6 months to 1 year, whilst continually trading forex as my income source. It therefore seems like a fabulous idea to set up an IBC or offshore business to benefit from very low tax.

I plan to compound my trading returns by leaving them in my brokerage/business account long term, making minimal withdrawals. But I will need to withdraw some money to live. Can this be done all through the company account or do I need a personal account too?

What jurisdiction do you reccomend for this and why? I am concerned that if I am finding my trading account as an offshore company, there will be only a limited number of brokers who will accept my business? I want to ensure that the broker I end up trading with is based in a very well established economy such as the UK, Singapore etc…

If I am travelling and living in new places, whilst remaining a UK resident, am I going to be liable for any UK tax? And Finally, if I end up going for residency in another jurisdiction with a lower tax rate, after 2 years of travelling, am I able to bring the companies money into that jurisdiction? Or does that change depending on the jurisdiction?

I really appreciate anyone who takes the time to read this far! All the best.
Johno

 

[bizworks]

Hi Johno.
The key is to convince HMRC that you are non resident for tax purposes in the UK and everything else falls into place after that. It is not easy to do unless you have been organizing your affairs with this in mind for some time. If they agree you have become non resident you won’t pay UK tax on income or gains you get outside the UK. To climb on to this golden platform, you need to pass HMRC's Statutory Residence Test. This is complicated, given your situation, and critical. Look up the test and download the "HMRC Guidance note for Statutory Residence Test (SRT): RDR3". Once they agree your foreign earned income is not their concern (the golden scenario) you can start to plan how to handle your future income. After checking it through you think you won't pass the SRT, you might want to think again about how you approach your venture. I wish you luck!

 

[adoffshore]

If anyone can point me in the direction of any good resources where I can get an understanding of the offshore world, I would appreciate that too!

you don't mean Offshorecorptalk has sufficient of information? use the search field there have been similar threads of yours here already

great advise @bizworks

 

[Johno]

Thank you so much for that Bizowrks, Ill dig into that now

 

[mnschwarz]

@Johno The advice above regarding becoming a non-resident is good but it is wise to obtain or plan for residency elsewhere also. Without having a jurisdiction you can prove tax residency, you can open yourself up to claims from many jurisdictions and nothing to cover yourself. I know Australia at least can see you as a tax resident simply for staying 6 months, among other things, and charge you tax on your worldwide income.

Also take note of the CFC laws that most countries have. These laws mean your idea of avoiding taxes with an IBC alone wont work (at least legally). Basically they state that if you have control over the IBC, you are liable for the taxes that the company should have paid.