UK NON DOM & HK COMPANY

[Juoffshore]

Hello Everyone,

One of my client is UK Non domiciled, and has a company in Hong Kong. He use Nominee director and Shareolder for that company. He is the UBO.

He does consulting for E-commerce companies when he travels outside the UK in order to manage the company when he is outside the UK (to avoid the HK company to be taxed as a UK One)

As a UK non dom, does anyone see any advantage to continue of using a NOMINEE DIRECTOR & SHAREOLDER service due to his tax statut ? ( he is not paying taxes on his offshore revenue if the company is not managed in the UK )

Thanks for your help !

 

[Martin Everson]

Speak to specialist tax consultant and get an advance ruling from HMRC. This area is an extremely complicated area. You see under UK CFC rules even as an RND the company itself may be required to file a UK tax return and potentially pay UK taxes on worldwide profits because of separate taxing provisions for individuals and companies. The same applies also because of UK anti avoidance rules which means the income is taxed if a UK person (i.e him) could potentially benefit from it. Put the two provisions together and it means in worst case he can end up with tax having to be paid twice.

The removal of nominees may potentially make it more transparent for HMRC to say he can potentially derive benefit from the offshore company under the corporate tax provision which bypasses the RND individual remittance tax basis. Non-disclosure could also mean he will receive a penalty even as an RND and HMRC will go back and want all the tax owed from prior years.

Being outside the UK as an RND to work is fine as long as he gets the Foreign Worker' Exemption i.e his foreign income should be subject to tax even if he is not in effect taxed. Bottom line is he must spend some money on speaking to a proper RND tax advisor in UK i.e KPMG, PWC etc not a high street accountant as HMRC will respect their opinion more.