UK to OffShore back to UK

DarkyUK

New Member
Hi Guys,

Bit of a strange question, although probably not for these forums :)

I'm looking to try to reduce the corporation tax a little by utilising an offshore company. We sell purchased from a 3rd party on a subscription basis, although the 3rd party is based in The Netherlands they have a UK Ltd company which we purchase from, we also bill that UK Ltd company for consultancy.

We have a couple of UK Ltd companies. If we were to form an offshore company and bank account could we purchase the software and bill the consultancy to that offshore company which in turn would purchase it from the 3rd party company allowing us to take advantage of a 0% corporation tax for that company since both its transactions would be international? The UK companies would still pay corporation tax but it would be reduced, also if that offshore was in the EU and VAT registered the VAT would cancel out?

The intention would then be that we drew dividends from that offshore as foreign income and paid the standard 10% tax on them via self assessment.

Does this sound feasible and legal? Any suggestions on the location for the offshore? I was originally considering BVI due to the cheap setup costs but Cyprus seems to be very popular on here.

Cheers, Andy
 

negon

hannibal the cannibal
BANNED MEMBER
Entrepreneur
Did you consult a local tax advisor? that may be the right way to go.
 

DarkyUK

New Member
@negon That is my intention, just questioning the feasibility of it first so I can understand what may, or may not, be a reasonable and legal proposal.
 

DarkyUK

New Member
I'm assuming I have looked at this totally wrong and since the management of the company is effectively in the UK then it would be taxed as though in the UK?
 

Hanif

Member
I'm assuming I have looked at this totally wrong and since the management of the company is effectively in the UK then it would be taxed as though in the UK?
Hi,

If you are considering this idea, then you certainly need a person to manage the overseas company for you.
At least there is some form of independency in that scenario.
How you go about that finally depends on the professional Tax advice you gain from the UK, and what options are suggested with the people you speak to in Cyprus or elsewhere you choose.
 
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