Thoughts on this UK tax avoidance

[BritishSecret]

1) be a non-dom and have your foreign income not remitted in the UK. As long as it's a passive income and you file for remittance basis - you will pay 0 taxes on this money
2) transfer the ownership of assets to a trusted third party - that can be a professional trust, a corporation managed by real people in low/zero tax jurisdiction or even a trusted person/family member who lives in let's say Cayman and manages your funds. Again - as long as the management is done overseas and there is no remittance - you will be fine.
One potential workaround - gifts are not taxed in the UK.

 

[Marzio]

transfer the ownership of assets to a trusted third party

If it's passive income why do you feel the need to transfer the ownership of the assets?

 

[Martin Everson]

1) be a non-dom and have your foreign income not remitted in the UK. As long as it's a passive income and you file for remittance basis - you will pay 0 taxes on this money

Labour government will abolish non-dom scheme if they come to power next year I believe. They already tabled legislation that failed this year under Conservative government. It won't under Labour I feel.

2) transfer the ownership of assets to a trusted third party - that can be a professional trust, a corporation managed by real people in low/zero tax jurisdiction or even a trusted person/family member who lives in let's say Cayman and manages your funds. Again - as long as the management is done overseas and there is no remittance - you will be fine.

On non-dom basis ok but with non-dom scheme potentially gone next year you are still beneficial owner/beneficiary etc. UK has strong anti-avoidance laws especially around trusts and corporation.

 

[BritishSecret]

If it's passive income why do you feel the need to transfer the ownership of the assets?

Safety and privacy

Labour government will abolish non-dom scheme if they come to power next year I believe. They already tabled legislation that failed this year under Conservative government. It won't under Labour I feel.



On non-dom basis ok but with non-dom scheme potentially gone next year you are still beneficial owner/beneficiary etc. UK has strong anti-avoidance laws especially around trusts and corporation.

Okay, let's assume the non-dom scheme isn't going to work, what do we do instead then?

 

[Martin Everson]

Safety and privacy


Okay, let's assume the non-dom scheme isn't going to work, what do we do instead then?

You can look at your option 2. However do not use Trusts.

 

[BritishSecret]

You can look at your option 2. However do not use Trusts.

Why not? I'm guessing I should use LLCs instead?

 

[Martin Everson]

Why not?

Because if you are the beneficiary of the Trust the tax anti-avoidance legislation around trusts is extensive.

I'm guessing I should use LLCs instead?

Why are you guessing this? What does this change? It is worse in fact because HMRC can deem offshore companies transparent for tax purposes whether the income of the company is distributed or not. They apportion the companies income to your control directly and you are then taxed at UK personal income tax rates. I have talked about this in other threads.

Offshore Company + Uk Non Dom Resident

Hello, If I'm a Uk non Dom resident, running an online business ( no uk client or business, it's a us based business ) in a Hong Kong offshore company. Will HMRC say that I "control and operate" the Hong Kong company from Uk and make me pay Uk corporate taxes on it? Or will I just pay Hong...

www.offshorecorptalk.com

P.S Best to go and get tax advice now as your setting yourself up for failure. We are in 2023 not 1993.

 

[BritishSecret]

Okay, Martin, where should I aim to get that advice from? And yes I'm aware of the year… Thanks for the help so far.

 

[Martin Everson]

Okay, Martin, where should I aim to get that advice from?

A tax advisor.

 

[BritishSecret]

A tax advisor

Well yes obviously, but where specifically should I be searching? Should I ask wealth management? Or someone who specialises in offshore tax accounting? I should, I already hire someone in the countries where I wish to set up my trusts?

 

[wellington]

Labour government will abolish non-dom scheme if they come to power next year I believe. They already tabled legislation that failed this year under Conservative government. It won't under Labour I feel.



On non-dom basis ok but with non-dom scheme potentially gone next year you are still beneficial owner/beneficiary etc. UK has strong anti-avoidance laws especially around trusts and corporation.

TBF if labour gets in, i wouldn't be surprised to see Non-Residents charged tax.

It's a sad state of affairs what the conservatives have become.

 

[Martin Everson]

Well yes obviously, but where specifically should I be searching?

The internet.

Keep in mind all providers based in EU and UK are required to disclosure all crossborder arrangements of its residents to authorities under DAC6:

EU DAC6 - Tax structures Disclosure & Reporting comes into effect 1 July 2020

https://www.pwc.ch/en/services/tax-advice/corporate-taxes-tax-structures/dac6.html What’s DAC6 all about? The EU is introducing an additional level of transparency in order to detect potentially aggressive tax arrangements. The amendment to Directive 2011/16/EU on mandatory automatic exchange...

www.offshorecorptalk.com

Should I ask wealth management?

If you have a wealth management relationship or meet the requirements then yes.

Or someone who specialises in offshore tax accounting?

This would be a good choice.

I should, I already hire someone in the countries where I wish to set up my trusts?

Don't do anything without first seeking professional advice.

 

[Marzio]

Well yes obviously, but where specifically should I be searching?

The internet.

LMAO i'm sure he never thought about that!

 

[Martin Everson]

LMAO i'm sure he never thought about that!

I take nothing for granted these days

 

[AndyAresa]

Keep in mind all providers based in EU and UK are required to disclosure all crossborder arrangements of its residents to authorities under DAC6:

Hi Martin Everson, do you know is there a similar requirement for providers based in the US?

 

[Martin Everson]

Hi Martin Everson, do you know is there a similar requirement for providers based in the US?

I know nothing about US and whether they have their own scheme unfortunately.

 

[BritishSecret]

I take nothing for granted these days

I'm just trying to learn as much as possible about tax structures. That's all martin.