UK LTD company + BVI company

[Neqzwer3]

Hey,

I looking for best way to optimize tax in UK.
My accountant gave me idea.
BVI as shareholder in LTD UK company.
95% incomes goes to BVI from LTD based on license agreement.
And later i will send money from BVI to my personal account as "loan" with 0%.

Its right? Does anyone have experience in such optimizations?

 

[symon]

Hi,

so at the end do you plan/need to reimburse the BVI?
as it is your accountant advice, you may go for it, just be sure that you can sue him in case you get issue with hrmc... ;-)

 

[Banker89]

It would work if you are not UK resident. This is a standard way of working for offshore structures. If you are UK resident it is risky though as the HMRC will claim they have the right to tax the BVI company too. If your accountant will put the advice formally in writing, go for it and you can point the finger at your accountant if you get any problems.

 

[Neqzwer3]

The cost of this optimization is 8000/9000 GBP. I do not know if it's a good price. Do you know cheaper solutions to optimize tax?

 

[Banker89]

I would say it all depends on you and how much tax you are going to save with it. It could be done cheaper, but then again if the accountant will take the blame if things go wrong, that is like an insurance policy that is worth paying for.

 

[Banker89]

You did not tell us if you are UK resident. Also the BVI is an expensive jurisdiction, any reason why you cannot use Belize or Seychelles?

 

[Neqzwer3]

I live in UK and i offer online digital services in EU countries. I looking for best way for optimize tax in my LTD company or i can open new company Offshore but where? Im newbie in offshore companies.

 

[Banker89]

Do the people who are paying you care where they pay to? Do they have any restrictions on paying to non-EU companies?

 

[Neqzwer3]

Our customers dont care where they pay but i have convenient payments for my clients. Our payment agents may not want to sign a contract with an offshore company

 

[Jon Goldberg]

Have you considered Emirates so called offshore company with local Emirates bank account, you pay flat fee once a year, no company tax headaches,
all your cash will be outside UK/EU, advise this with your payment agents to make sure it will work , you need to visit Emirates one time in order to open
a bank account, all this would be much cheaper than your mentioned every year optimization 8000/9000 GBP.

 

[Banker89]

The advise on Emirates is good, but it is important to change your residency too. If you set up a company in Emirates you can easily get residency there.

 

[Liveera]

Hi,

I think that's a big mistake if you follow his instruction : both of you will be placed under HRMC regulations. Why ? Because they will qualify your transfer as '' Transfer Pricing", indeed OECD Regulations are actually defining a lot of methods for those types of intellectual transfer or licence transfer from parent company to subsidiary companies due to the large amount of money gained by Google or Amazon with transfer pricing and intellectual property regulation.

If you transfer small amount , it shouldn't be a problem but you need to be careful about the amount because any large transfer could trigger a control from HRMC. You should use tax optimization with dividends from parent company to subsidiary , you will only pay 5% of taxes if you transfer dividends from parent to subsidiary so it's a better choice to avoid HRMC

 

[negon]

You may simply setup a fake company for your business and from there route the money around. Look at UK where it is pretty easy to do such.

 

[fshore]

Is it enough to keep 5 % in the UK company ? Would 10% be safer ? How is Ireland vs UK for this ?