In need of some help and guidance!

[Scanman]

Hello all, I'm so glad to have found this forum!

About 3 years ago I started accepting Bitcoin for a very unique (legal) service that I offer, and it exploded in popularity to the tune of £10k a month. As a person who'd never seen more than a £1000 bank balance I'm now completely out of my depth I really really need some help! I've filled 4 UK bank accounts to the FSCS insured maximum limit of £85k and have 100k under the mattress, and I may have forgot to tell the tax man about it all and am now bricking it. I have been using localbitcoins.com to UK bank accounts in small amounts, and a bitcoin debit card to take out cash - which I now have entirely too much of. I need a plan!

It is now clear to me that I really can't spend this money to buy a house or a flashy car without declaring its source and losing half of it in taxes. So its well past time to start moving funds offshore, and sending future income that way too, perhaps starting a company, and looking at options to legally continue trading outwith the reach of the UK tax man.

So I'm really hoping someone will take pity on me and give me some guidance. I've read and read the forums the last few days, but I can't quite find the right plan and way forward for me. If anyone can point me in the right direction or is willing to have a chat with me, I'd sure appreciate it!

Scanman.

 

[Milky Moon]

Hello all, I'm so glad to have found this forum!

About 3 years ago I started accepting Bitcoin for a very unique (legal) service that I offer, and it exploded in popularity to the tune of £10k a month. As a person who'd never seen more than a £1000 bank balance I'm now completely out of my depth I really really need some help! I've filled 4 UK bank accounts to the FSCS insured maximum limit of £85k and have 100k under the mattress, and I may have forgot to tell the tax man about it all and am now bricking it. I have been using localbitcoins.com to UK bank accounts in small amounts, and a bitcoin debit card to take out cash - which I now have entirely too much of. I need a plan!

It is now clear to me that I really can't spend this money to buy a house or a flashy car without declaring its source and losing half of it in taxes. So its well past time to start moving funds offshore, and sending future income that way too, perhaps starting a company, and looking at options to legally continue trading outwith the reach of the UK tax man.

So I'm really hoping someone will take pity on me and give me some guidance. I've read and read the forums the last few days, but I can't quite find the right plan and way forward for me. If anyone can point me in the right direction or is willing to have a chat with me, I'd sure appreciate it!

Scanman.

You have £340,000 in the banks, and £100,000 cash.

Ever been on a holiday in Montenegro?

 

[Scanman]

Can't say I have - I'll do some research! Offhand are they SEPA zone and are the funds insured at all?

 

[Milky Moon]

Can't say I have - I'll do some research! Offhand are they SEPA zone and are the funds insured at all?

No they are not within SEPA, but use IBAN. They insure till 50k. But the nicest thing is they are outside AEoI/CRS, and normally do not ask to many questions about the source of your wealth.

Offshore Banking in Montenegro

 

[Scanman]

Great advice, many thanks!

 

[polonieth]

Hello all, I'm so glad to have found this forum!

About 3 years ago I started accepting Bitcoin for a very unique (legal) service that I offer, and it exploded in popularity to the tune of £10k a month. As a person who'd never seen more than a £1000 bank balance I'm now completely out of my depth I really really need some help! I've filled 4 UK bank accounts to the FSCS insured maximum limit of £85k and have 100k under the mattress, and I may have forgot to tell the tax man about it all and am now bricking it. I have been using localbitcoins.com to UK bank accounts in small amounts, and a bitcoin debit card to take out cash - which I now have entirely too much of. I need a plan!

It is now clear to me that I really can't spend this money to buy a house or a flashy car without declaring its source and losing half of it in taxes. So its well past time to start moving funds offshore, and sending future income that way too, perhaps starting a company, and looking at options to legally continue trading outwith the reach of the UK tax man.

So I'm really hoping someone will take pity on me and give me some guidance. I've read and read the forums the last few days, but I can't quite find the right plan and way forward for me. If anyone can point me in the right direction or is willing to have a chat with me, I'd sure appreciate it!

Scanman.

Congrats on the gains. I'm in a similar sort of position. Although mainly held in crypto and not fiat. It's hard to get any sort of advice on this kind of stuff though, no above board UK accountants really know it or want to advise. And the offshore setup folk aren't in the business of hand holding or giving out advice, they just want paying for the setup.

No they are not within SEPA, but use IBAN. They insure till 50k. But the nicest thing is they are outside AEoI/CRS, and normally do not ask to many questions about the source of your wealth.

Offshore Banking in Montenegro

Which banks are recommended?

 

[Scanman]

Congrats on the gains. I'm in a similar sort of position. Although mainly held in crypto and not fiat. It's hard to get any sort of advice on this kind of stuff though, no above board UK accountants really know it or want to advise. And the offshore setup folk aren't in the business of hand holding or giving out advice, they just want paying for the setup.

Which banks are recommended?

Thanks!

Yes cryptos really freak out financial institutions. As you know it is never advisable to disclose to a bank that your deposits are from a crypto source. However that leaves you in a position where source of funds if ever asked is a problem, even when completely legitimate. So it's tough when you are turning large profit all of a sudden and have no corporate or even business like me - the advice is hard to find, and shaky at best. EMIs are a very new thing, but they are certainly making it easier to turn crypto into fiat. The question for me remains though - what do do with the FIAT to stay safe and avoid the tax man as mush as possible and keep funds safe and secure.

As to Montenegrin Banks - click the link that Milky posted, it lists all the banks in the country and has great info.

 

[Constant Capital SC]

Hi


I assume you have a Company in UK for your service? In which your income is bitcoin.


This might be an option, but what he needs to do is open up IBC which will invoice his company invoice for service, then start sending the profit to the IBC.


So for now maybe setup an IBC (International Business Company) which then opens the bank account. which will invoice your company invoice for service, then start sending the profit to the IBC.

I am not too sure what kind of service you are providing doing but let’s assume it is internet base business, and it is selling a product online! then I can suggest that you shift the business base to the IBC which will protect the profits from Tax man in UK you are worried about as they would be able to touch your money this way. After shifting the business main stream to IBC you can further cover the IBC with insurance wrapper which will protect the UBO from Tax Liability completely as it will change the UBO from the person to insurance company, and at the same time you will no longer have a limit on the amount you can bank in your IBC bank account.


That said we would need more information to guide you further.


Thanks

 

[Scanman]

Hi


I assume you have a Company in UK for your service? In which your income is bitcoin.


This might be an option, but what he needs to do is open up IBC which will invoice his company invoice for service, then start sending the profit to the IBC.


So for now maybe setup an IBC (International Business Company) which then opens the bank account. which will invoice your company invoice for service, then start sending the profit to the IBC.

I am not too sure what kind of service you are providing doing but let’s assume it is internet base business, and it is selling a product online! then I can suggest that you shift the business base to the IBC which will protect the profits from Tax man in UK you are worried about as they would be able to touch your money this way. After shifting the business main stream to IBC you can further cover the IBC with insurance wrapper which will protect the UBO from Tax Liability completely as it will change the UBO from the person to insurance company, and at the same time you will no longer have a limit on the amount you can bank in your IBC bank account.


That said we would need more information to guide you further.


Thanks

Great and helpful post, thank you!

No, I do not have a UK company, all transfers from Bitcoin to £GBP have gone into personal UK current accounts, which I realise is rather stupid now, but I never expected business to take off as rapidly as it has. I sell a service rather than a product, for simplicity lets call it consultancy, and for it I accept only Bitcoin. UK banks are so unfriendly to Bitcoin I hesitate to start a business here and declare Bitcoin as the source of the deposits or use a major Bitcoin exchange to send frequent payments. So I use localbitcons where buyers using personal and business accounts send me the Fiat to my personal accounts, so it fly's under the radar (for now) - though not without risk (of fraud in one case, where someone bought bitcoin with a stolen bank account and the bank shut my account without warning or even wanting to hear an explanation). Using a Bitcoin exchange to the account is safer and better rates, but wouldn't last long sending to a UK account as I understand it, even if it were a business bank account rather than personal. So EMIs come into play in bouncing funds though which minimises risk and obfuscates the source a bit, but still leaves the problem of the question where did the source of funds come from if ever asked or demanded to prove. Of course I can say consultancy, but because amounts and combined in their transfer, it would become an account nightmare to try and prove it all, and well beyond me as I really know nothing of how to run a business!

So back to your advice. If in future I form a UK Company and assuming I were to sort the accounting end of things to try and legitimise the funds hitting the account, and then form an IBC and invoice the UK company - can I invoice it for 100% of the deposits, or is that way too dodgy? Should the UK company pay any tax on a portion for legitimisation of all this? Is there any advantage to having a UK company at all if I can simply deposit funds straight to an account held by an IBC? Was this solution simply for moving funds I already have banked in the UK, out?

Which begs the question, can an IBC open a UK (or EU) bank account, claim all payments are from sources outwith the country and not subject to taxation? In which case can I simply cash out my Bitcoins to an IBC's bank account and remain unfettered by the tax man here? Does that bank account even need to be offshore?

I'm not clear on what a UBO is (and count find anything on google), could you expand on that for me? How does one turn and IBC into an insurance company, and why does that lift limits on the bank account.

Thanks!

 

[countryfree]

I don't know if you've realized it, but moving your funds offshore won't change anything. If they are in bank accounts in UK banks, the tax services are aware of it, and you shall answer questions about that income. Then, what I don't understand is why you converted all those bitcoins, if you didn't any plan to invest that money?

 

[polonieth]

Great and helpful post, thank you!

No, I do not have a UK company, all transfers from Bitcoin to £GBP have gone into personal UK current accounts, which I realise is rather stupid now, but I never expected business to take off as rapidly as it has. I sell a service rather than a product, for simplicity lets call it consultancy, and for it I accept only Bitcoin. UK banks are so unfriendly to Bitcoin I hesitate to start a business here and declare Bitcoin as the source of the deposits or use a major Bitcoin exchange to send frequent payments. So I use localbitcons where buyers using personal and business accounts send me the Fiat to my personal accounts, so it fly's under the radar (for now) - though not without risk (of fraud in one case, where someone bought bitcoin with a stolen bank account and the bank shut my account without warning or even wanting to hear an explanation). Using a Bitcoin exchange to the account is safer and better rates, but wouldn't last long sending to a UK account as I understand it, even if it were a business bank account rather than personal. So EMIs come into play in bouncing funds though which minimises risk and obfuscates the source a bit, but still leaves the problem of the question where did the source of funds come from if ever asked or demanded to prove. Of course I can say consultancy, but because amounts and combined in their transfer, it would become an account nightmare to try and prove it all, and well beyond me as I really know nothing of how to run a business!

So back to your advice. If in future I form a UK Company and assuming I were to sort the accounting end of things to try and legitimise the funds hitting the account, and then form an IBC and invoice the UK company - can I invoice it for 100% of the deposits, or is that way too dodgy? Should the UK company pay any tax on a portion for legitimisation of all this? Is there any advantage to having a UK company at all if I can simply deposit funds straight to an account held by an IBC? Was this solution simply for moving funds I already have banked in the UK, out?

Which begs the question, can an IBC open a UK (or EU) bank account, claim all payments are from sources outwith the country and not subject to taxation? In which case can I simply cash out my Bitcoins to an IBC's bank account and remain unfettered by the tax man here? Does that bank account even need to be offshore?

I'm not clear on what a UBO is (and count find anything on google), could you expand on that for me? How does one turn and IBC into an insurance company, and why does that lift limits on the bank account.

Thanks!

I think maxing out UK bank accounts here is a mistake.

The problem you have is even if you put the money offshore. What are you planning to do with it? If you are planning on living abroad then this probably makes sense. But if you want to bring it back into the UK you'll run into problems. Unless you bring such small quantities back it vanishes in living expenses.

I'm not sure offshore makes sense from you, you'd be better off running a UK Ltd Company, obfuscating how

 

[polonieth]

Forum messing up here some securi block. I meant:

Well obviously putting the money in UK personal accounts was a mistake. But not much you can do about that now.

The problem you have is even if you put the money offshore. What are you planning to do with it? If you are planning on living abroad then this probably makes sense. But if you want to bring it back into the UK you'll run into problems. Unless you bring such small quantities back it vanishes in living expenses. I'd probably not cash as many bitcoins back to fiat as you've done though.

 

[Scanman]

I don't know if you've realized it, but moving your funds offshore won't change anything. If they are in bank accounts in UK banks, the tax services are aware of it, and you shall answer questions about that income. Then, what I don't understand is why you converted all those bitcoins, if you didn't any plan to invest that money?

It's less about moving funds offshore from my existing UK accounts now, but more that all future income from Bitcoin exchanged to Fiat not go the same route, and land somewhere safe instead - obviously it was a big mistake, and a big risk though as they are non-interest bearing accounts I might sneak under the radar (knock wood). I'm looking for a future solution at this point.

 

[Scanman]

Forum messing up here some securi block. I meant:

Well obviously putting the money in UK personal accounts was a mistake. But not much you can do about that now.

The problem you have is even if you put the money offshore. What are you planning to do with it? If you are planning on living abroad then this probably makes sense. But if you want to bring it back into the UK you'll run into problems. Unless you bring such small quantities back it vanishes in living expenses. I'd probably not cash as many bitcoins back to fiat as you've done though.

I admit, it was not that bright.. i didnt know any better as I have 0 business experience, but also I didn't expect to do as well as I have!

I'd like to insure I do not continue to make this mistake, and instead put and new funds somewhere safe from the tax man. Money that goes offshore (or wherever) I would like to simply save for a very comfortable retirement, and perhaps use to buy a house and car and hold those assets in a (offshore?) company name rather than my own. As far as living expenses I have enough now to last me comfortably for a long time. So I wouldn't need to transfer any more in to the UK for the foreseeable future unless it is for the purchase of assets.

I know now that I have gone about this all wrong - I'm trying to straighten it all out.

 

[countryfree]

I advise to keep your bitcoin income in bitcoins. I see people turning their cash into bitcoin. If you're lucky enough to have a bitcoin income, don't convert it! You may also want to avoid the Sterling which could go down because of brexit.

 

[Scanman]

Bitcoin is far too unstable. I wouldn't sleep at night knowing it could be worth thousands less in the morning, and I cannot buy tangible assets with it - at least not yet. Sterling may drop for a while, but as I live in the UK it will still have the same value. Not that I do not believe in diversification, but holding several hundred thousand in Bitcoin is not a risk I'm willing to take. Thanks anyway.

 

[ceiling]

Scanman I'd love to have a chat with you, I've just had a read of your posts and your situation is almost identical to mine albeit my turnover is reduced now given we had our stripe merchant account blocked. Also being UK based I'm currently exploring the possibilities of what to do with money earned, at the moment it's purely bitcoin. I'm happy to ride the wave of bitcoins every growing value but every night have this horrible feeling the bubble will burst. At this stage I'm leaning towards getting darks from a member of here and going via an emi

 

[Scanman]

Darks > EMI certainly works, but the question quickly follows: Do you trust the EMI with hundreds of thousands of your money, uninsured, in another name, or do you withdraw it all form ATMs and stuff it somewhere... but where? I've dropped you a PM ceiling - perhaps we can share some ideas. These isn't much help here in our situation other than what you mentioned sadly.