UK Citizens, Adult Industry, Low Tax solutions

[theviewer1985]

Hey all

Just stepping into the world of offshoring. We've never liked UK - mostly since Brexit and now with tax hikes left right and centre we have totally had enough. We want out of this tax regime. 0% tax would be ideal... but to be fair, anything less than 20% is totally fine.

Few details that may or may not be important
- We only have UK passports - BOOOOO
- We make about £150k-200k per year - currently UK LTD.
- We use a few different adult sites to sell on, such as OnlyFans
- We (may) own a house in UK over the next couple months - if this will seriously damage our chances of offshoring, we would pull out. (our intention is to have a holiday rental manager take over it if we do move - so it wont be 'available' to us)
- We are open to suggestions... we dont need to stay in UK for any length of time.

Anyway, with that said. I think like everyone else, Dubai is the first place we are looking into. A couple residency agencies out there, have said for £10k we can get 2x personal bank accounts and 2x residencies. They know what we do, and dont think wed have issues providing we dont film our content out there. They say we will get 0% and can just spend that money globally with no issues. The agencies dont seem to think I even need a Dubai company formed. Which if true, is extra cool... I guess.

My rough plan, if we were to do that idea is to stay less than 183 days in UK. Then travel to a second country for 3 months, then a 3rd country for 3 months then back to UK for 6. The 2nd and 3rd countries I presume will be easy enough to do on a tourist visa and can be different each time.

The obstacles with this, is will Dubai banks even accept the money from adult sites, I dont know. And is there a risk (even if we dont film in Dubai) that they will suddenly block our accounts and empty the bank.

And a bigger obstacle is not knowing the details of how the UK side of things will work. Is it literally as easy as not living here for 6 months... and having my accountants proving to HMRC with flight receipts or something?

Thats plan 1....

Plan 2 is a little more over to you. It's finding hidden gems around the world that we can set up shop in for 5 or 10 years or something. I hear of places like Estonia and Cyprus on these forums and they seem very tempting to us. As I said above, I dont mind paying some tax... like 20% providing its simple. I saw a don Dom status in Portugal, but to become a resident there I think id need a EU passport.

Anyway, any help is appreciated. We are very new to this field so go easy please

Cheers

 

[scooterguy]

A micro-company in Romania might be what you are looking for (1% CT for income up to 500K EUR, 8% dividend tax).

 

[Clank]

P**N is ilegal in Dubai UAE.

 

[theviewer1985]

A micro-company in Romania might be what you are looking for (1% CT for income up to 500K EUR, 8% dividend tax).

Romania is on my list of possibilities actually. And I have heard about that "micro company" set up.

So a couple questions (again, I am new to this)

So id have to set up a company in Romania, and that has 1% corp tax on income less than 500k correct? And then the goal is to use dividends to get that into the bank, which has 8% tax? Assuming thats correct, that is a hell of a lot better than 25% corp tax, 25% personal tax and 12% NHS tax here in the UK

The next stage is, how does one become a tax resident of Romainia. Is it the usual? (live there for over 183 days)

P**N is ilegal in Dubai UAE.

Yeah I know. But we wouldnt be making it in the country and the company would be set up as a "social media firm" or something lol

Unless you are saying the banks would shut us down? As that would be useful info to know...

 

[Alonzo]

Anyway, with that said. I think like everyone else, Dubai is the first place we are looking into. A couple residency agencies out there, have said for £10k we can get 2x personal bank accounts and 2x residencies. They know what we do, and dont think wed have issues providing we dont film our content out there. They say we will get 0% and can just spend that money globally with no issues. The agencies dont seem to think I even need a Dubai company formed. Which if true, is extra cool... I guess.

Forget Dubai. You will end up in prison. They will not accept P**N money

My rough plan, if we were to do that idea is to stay less than 183 days in UK. Then travel to a second country for 3 months, then a 3rd country for 3 months then back to UK for 6. The 2nd and 3rd countries I presume will be easy enough to do on a tourist visa and can be different each time.

Won't work. the UK will consider you as tax resident because you have ties - house, company, citizenship,...

 

[theviewer1985]

Forget Dubai. You will end up in prison. They will not accept P**N money

Won't work. the UK will consider you as tax resident because you have ties - house, company, citizenship,...

Thanks for the info. So the question now is, how would I lose my tax residency in UK. Let's say rather than moving around the world, I rent a house in Country X for 7 months and have a Company there... and then only stay in UK for less than 5 months? Could it be as simple as that?

 

[Alonzo]

Thanks for the info. So the question now is, how would I lose my tax residency in UK. Let's say rather than moving around the world, I rent a house in Country X for 7 months and have a Company there... and then only stay in UK for less than 5 months? Could it be as simple as that?

Close all ties with the UK (except citizenship otherwise you would be stateless) and make as many ties with the other country as possible - bank account, permanent home, relatives, daily car and so on.

Your economic and vital interest should be in that other country. That is enough to not be considered as a UK resident for tax purposes

 

[scooterguy]

So id have to set up a company in Romania, and that has 1% corp tax on income less than 500k correct? And then the goal is to use dividends to get that into the bank, which has 8% tax? Assuming thats correct, that is a hell of a lot better than 25% corp tax, 25% personal tax and 12% NHS tax here in the UK

That is correct. You would both be shareholders and employees of the company. You can give yourselves low salaries, and get paid mostly via dividends.

The next stage is, how does one become a tax resident of Romainia. Is it the usual? (live there for over 183 days).

You don't need to be there 183 days. Having a company and being employees of such company would automatically make you a tax resident there.

You just want to make sure that the UK doesn't consider you a resident anymore and wants to tax your Romanian income. This is usually achieved by not spending more than 90 days per tax year in the UK and not having enough ties to the UK. You may want to take a look at this: Tax on foreign income.

 

[theviewer1985]

That is correct. You would both be shareholders and employees of the company. You can give yourselves low salaries, and get paid mostly via dividends.



You don't need to be there 183 days. Having a company and being employees of such company would automatically make you a tax resident there.

You just want to make sure that the UK doesn't consider you a resident anymore and wants to tax your Romanian income. This is usually achieved by not spending more than 90 days per tax year in the UK and not having enough ties to the UK. You may want to take a look at this: Tax on foreign income.

This is very helpful thank you. I do have one other option then... as losing my UK tax residence seems quite difficult. Even if I never set foot on UK shores, there is a chance my history, family, (potential) house purchase might keep me here.

However, if im not mistaken, that is still a much better solution. Because I would have 1% Corp Tax (instead of 19-25% UK Corp tax)? The question is, how much tax would I pay if sending that as dividends from Romania to me as a UK Tax resident?

 

[theviewer1985]

That is correct. You would both be shareholders and employees of the company. You can give yourselves low salaries, and get paid mostly via dividends.



You don't need to be there 183 days. Having a company and being employees of such company would automatically make you a tax resident there.

You just want to make sure that the UK doesn't consider you a resident anymore and wants to tax your Romanian income. This is usually achieved by not spending more than 90 days per tax year in the UK and not having enough ties to the UK. You may want to take a look at this: Tax on foreign income.

To add my last reply to you - even if I am a Tax resident in UK, isnt that what double taxation treaties are for? So if I own a Romania LTD, paying me dividends - I will of course pay tax in Romania. So doesnt that relieve me from paying tax in UK since the two countries have a tax treatie?

 

[Barney2201]

For the Uk you would have to live by the Statutory Residence Test (SRT), essentially you would be limited to staying 90 midnights per year in the UK. And as previously said you need to cut as many ties as possible e.g. if you own a house you cannot use this for accommodation it needs to be rented out full time or ideally don't own property or if you do own it through a company. You could register a company offshore which in tern can also own the UK company so you don't always have to close the UK arm then remove profits to offshore company but make sure to leave some profit in the Uk company for HMRC.... Ideally close the UK company and just have an offshore however I know that can be harder than said. The other option is to invoice profit out of the Uk company if you operate a business model which could create invoices to the UK, I am guessing in your case you could 'create' the content in one part of the world then sell it to the UK company which then effectively retails it. I think at circa £200K a year Dubai is ok but it's a very expensive lifestyle and not suited to all tastes plus you do run the risk of falling fowl of the law and it's not a country you want to mess about with.... If you can work remotely maybe consider a 'sand box' location like BVI, Antigua, Mauritius etc Everywhere has it's +/- just got to find the right place... Hence I now live on Sark and spend most of the year travelling...

 

[benbao]

Why do you want to spend close to 180 days in the UK if you dislike it so much and don't have a reason to be there? Just makes everything difficult...

My advice is leave everything as is, travel around and look at some nice places to live with good tax. Once you found one setup shop there and discard UK. If you don't really wanna cut ties with the UK then just pay the tax and focus on making more money instead of saving tax.

 

[scooterguy]

To add my last reply to you - even if I am a Tax resident in UK, isnt that what double taxation treaties are for? So if I own a Romania LTD, paying me dividends - I will of course pay tax in Romania. So doesnt that relieve me from paying tax in UK since the two countries have a tax treatie?

That would only work if your Romanian company had actual substance in Romania. For example, if you open a restaurant in Bucharest, that is unlikely to be taxed by the UK, even if spend all of your time in the UK.

In your particular case, however, CFC and anti-avoidance UK rules would come into action, and your Romanian corporation would be considered an UK resident, hence subject to UK corporate tax.

There are countries with no CFC rules or territorial tax regimes that could work, but it would still mean you moving out of the UK.

In summary, if you want to continue living in the UK, you'll have to pay UK taxes. If you want to avoid UK tax legally, it's really not that hard, but you will have to spend less than 90 days a year in the UK and have your center of economic activities somewhere else.

 

[Mssquirrel]

Hey all

Just stepping into the world of offshoring. We've never liked UK - mostly since Brexit and now with tax hikes left right and centre we have totally had enough. We want out of this tax regime. 0% tax would be ideal... but to be fair, anything less than 20% is totally fine.

Few details that may or may not be important
- We only have UK passports - BOOOOO
- We make about £150k-200k per year - currently UK LTD.
- We use a few different adult sites to sell on, such as OnlyFans
- We (may) own a house in UK over the next couple months - if this will seriously damage our chances of offshoring, we would pull out. (our intention is to have a holiday rental manager take over it if we do move - so it wont be 'available' to us)
- We are open to suggestions... we dont need to stay in UK for any length of time.

Anyway, with that said. I think like everyone else, Dubai is the first place we are looking into. A couple residency agencies out there, have said for £10k we can get 2x personal bank accounts and 2x residencies. They know what we do, and dont think wed have issues providing we dont film our content out there. They say we will get 0% and can just spend that money globally with no issues. The agencies dont seem to think I even need a Dubai company formed. Which if true, is extra cool... I guess.

My rough plan, if we were to do that idea is to stay less than 183 days in UK. Then travel to a second country for 3 months, then a 3rd country for 3 months then back to UK for 6. The 2nd and 3rd countries I presume will be easy enough to do on a tourist visa and can be different each time.

The obstacles with this, is will Dubai banks even accept the money from adult sites, I dont know. And is there a risk (even if we dont film in Dubai) that they will suddenly block our accounts and empty the bank.

And a bigger obstacle is not knowing the details of how the UK side of things will work. Is it literally as easy as not living here for 6 months... and having my accountants proving to HMRC with flight receipts or something?

Thats plan 1....

Plan 2 is a little more over to you. It's finding hidden gems around the world that we can set up shop in for 5 or 10 years or something. I hear of places like Estonia and Cyprus on these forums and they seem very tempting to us. As I said above, I dont mind paying some tax... like 20% providing its simple. I saw a don Dom status in Portugal, but to become a resident there I think id need a EU passport.

Anyway, any help is appreciated. We are very new to this field so go easy please

Cheers

You have to check with a professional in the UK if you had been a tax resident for the last few years it will be harder to cut ties I think you should leave for a year when new tax year starts or something like that, you have a 90 day tie for sure which will make you a tax resident if you spend 3 months only but there is more to consider.
Dubai is not the best option, I was thinking about go there but still receive adult money might be risky. Romania seems a good option if you make less than 500k a year. Maybe Montenegro or Cyprus could be an option too not sure about the banking there tho.

 

[theviewer1985]

Why do you want to spend close to 180 days in the UK if you dislike it so much and don't have a reason to be there? Just makes everything difficult...

My advice is leave everything as is, travel around and look at some nice places to live with good tax. Once you found one setup shop there and discard UK. If you don't really wanna cut ties with the UK then just pay the tax and focus on making more money instead of saving tax.

Oh that was just to know my options - like I presumed I could come back for 180 days if I wanted too... but if it makes things complicated, I happily wouldn't.

Which is looking like one of our main options at this point to be fair. Move to Cyprus, open a LTD and stay there permanently with Non-dom status

The grey area with that, is this church conversion we are planning to buy. It's just too sexy to pass on. Argh - it's a fight between head and heart that property. But surely that wouldn't get in the way of this lifestyle/tax move, if I'm clearly living in Cyprus 12 months of the year and registered as a 'non-resident landlord' with HMRC.

 

[luap]

You don't need to guess or wonder, just do the test: Guidance – Guidance – GOV.UK

Cut all business ties with the UK, rent out your property full time, move to Cyprus, rent a place, exchange your drivers licence for a CY one etc, pay your taxes in CY. Either spend 60 days in Cyprus or 365, your choice - just don't spend excessive time in the UK and definitely don't film any more content there.

 

[manukahoney]

You don't need to guess or wonder, just do the test: Guidance – Guidance – GOV.UK

Cut all business ties with the UK, rent out your property full time, move to Cyprus, rent a place, exchange your drivers licence for a CY one etc, pay your taxes in CY. Either spend 60 days in Cyprus or 365, your choice - just don't spend excessive time in the UK and definitely don't film any more content there.

This is the correct approach.
Cyprus is very friendly to British, you can even bring your own car (they also drive on the correct side of the street), almost everything can be done in English, corporate taxes are low.
Close the UK company, reincorporate on Cyrpus, employ yourself, spend 60+ days there (or 90-120, it's a nice place to spend spring and autumn) and travel the rest. This is some good manual about the UK residency:
https://imperiallegal.com/tax-residency-in-uk/

 

[theviewer1985]

This is the correct approach.
Cyprus is very friendly to British, you can even bring your own car (they also drive on the correct side of the street), almost everything can be done in English, corporate taxes are low.
Close the UK company, reincorporate on Cyrpus, employ yourself, spend 60+ days there (or 90-120, it's a nice place to spend spring and autumn) and travel the rest. This is some good manual about the UK residency:
https://imperiallegal.com/tax-residency-in-uk/

Out of interest, why do you say spend 60+ days and travel the rest? Is that just for travelling's sake?... or is this approach so that I don't end up becoming a tax resident in Cyprus and therefore I'd not be a tax resident of any country?

Or actually, on second thoughts, maybe you are saying it for VISA's sake? So I would be a tax resident of Cyprus, but I just wouldn't need any complicated long term VISAs

Sorry if I'm being stupid

 

[manukahoney]

Out of interest, why do you say spend 60+ days and travel the rest? Is that just for travelling's sake?... or is this approach so that I don't end up becoming a tax resident in Cyprus and therefore I'd not be a tax resident of any country?

Or actually, on second thoughts, maybe you are saying it for VISA's sake? So I would be a tax resident of Cyprus, but I just wouldn't need any complicated long term VISAs

Sorry if I'm being stupid

My assumption is that you want to live somewhere nice, pay a reasonably small amount of tax and do what you do without breaking local laws. Cyprus will provide you with a tax residence if you have a place to stay (renting/owning) and spend 60+ days there in a tax year. You will be able to structure your income so you pay little or no tax (seek professional advice on how structure your activities to optimise the tax burden), you will seize to be a UK tax resident (the rules are easy and mentioned in the link above or on official HMRC website) and will be able to use 300 days however you want - maybe spending a little bit more on Cyprus, or travelling globally. Just don't spend more than 180 days in any country, don't fall back into UK tax residency and spend 60+ days on Cyprus to have a low-cost tax "home".

Not a legal advice of course, just some food for thoughts.

 

[luap]

Out of interest, why do you say spend 60+ days and travel the rest? Is that just for travelling's sake?... or is this approach so that I don't end up becoming a tax resident in Cyprus and therefore I'd not be a tax resident of any country?

Or actually, on second thoughts, maybe you are saying it for VISA's sake? So I would be a tax resident of Cyprus, but I just wouldn't need any complicated long term VISAs

Sorry if I'm being stupid

60 days is the minimum to maintain your tax residency in Cyprus, not the maximum. You can spend 365 days per year in Cyprus if you wish without changing anything.