UK Tax Resident with LTD – what possible tax savings and structures?

[Roamer]

Straight to the point...

Breakdown of the situation:

• Tax resident in England, UK.
• EEA passport.
• Sole shareholder, director, and employee of my limited company.
• Team of freelancers and virtual assistants helping day-to-day (mostly based in the Philippines).
• Personally involved, weekly, for high level decisions and guidance to my two managing VAs.

Revenue-wise:

• Mostly affiliate revenue from the US.
• Yearly profits between GBP200.000 to GBP250,000 before corporation tax.
• Salary around GBP10,000, dividends for most of the rest.
• Reinvesting some in the company, too.

Goals:

1. Remain in the UK as an individual
2. Save as much tax as legally possible

Obviously, by staying myself in the UK, the upside in terms of tax savings is severely limited as I would still owe a bunch of income tax for my salary and dividends.

Then, moving the company could save 10% to 19% in corporation tax, but only if it truly becomes resident in the right jurisdiction. Which is hard as I manage and control the company so how could I mitigate this? Flying weekly? But the "managers" are not even living in a low-tax country, most of them are in the Philippines. So appoint a nominee director, and then let them be while flying to the Philippines regularly?

Just trying to figure out some good structure. I know I'll still pay a lot, but hoping you could shed some light and give some pointers.

–Roamer

 

[blizz]

Obviously, by staying myself in the UK, the upside in terms of tax savings is severely limited as I would still owe a bunch of income tax for my salary and dividends.

Can't you reduce the personal income tax you have to pay in the UK if you setup a company offshore? In the past I know it was possible. But after all the s**t going on in Europe and the Brexit I'm not certain it is possible.

Best would be to ask a tax advisor to help you setup a good structure. I know a lot of wealthy people in the UK have no worries living their while they shuffling millions into their accounts.

 

[Roamer]

I know a lot of wealthy people in the UK have no worries living their while they shuffling millions into their accounts.

The thing is, my income is not high enough to justify or even allow for more complex structures. Most of them are basically coming down to some sort of transfer pricing and/or licensing, IP.

As per setting up the company offshore, it is totally doable but the key part is to have substantial residence in whatever jurisdiction chosen for the company. Especially as it is not a holding company but rather a true trading company.

Definitely speaking to some international tax advisor sometime soon but wanted to gather some POVs and insights first.