Question Dubai company for UK citizen to protect £5m from taxes?

[fastfloral]

Let's say you have £5m in assets. (£4m invested in american/global index stocks + £1m UK home). Obviously, if you use it without any structure, you'd be liable to capital gains tax and inheritance tax. Ideally, you'd like to stay in the UK as you have family and friends here, plus I hate hot weather. Before the 2008 trust fund law change, you could've put into a trust fund (and pay the relevant tax) and that was that. You get to live in the UK with relative low tax and asset protection when you pass. But now with the 20% surcharge that's out the question. You could also go through the FIC route, but would you really have access to your funds if you really needed them back (lets say to buy another £1m property, or an expensive car)? the tax isn't great either as you pay corporation tax (25% soon) yearly. Foreign investors in the UK usually use the Non-dom status so avoid the capital and IHT problems i've listed above, but that isn't an option for myself as a UK citizen

Is the only option really to move out offshore? Are there offshore's with colder weather?

The UK has a 5 year period after you move offshore before your assets become IHT free. So, I was thinking of creating a Dubai company, and moving all the assets there for the 5 year period (as it becomes business property and out of reach of HMRC) before it becomes exempt. At the same time living somewhere in the Carribean. And then moving the funds to another offshore company (perhaps Caribbean or cyprus) for security and not to go Dubai every 6 months. Is this plan unrealistic? Does anyone know local solutions for this problem?

 

[Vor]

Let's say you have £5m in assets. (£4m invested in american/global index stocks + £1m UK home). Obviously, if you use it without any structure, you'd be liable to capital gains tax and inheritance tax. Ideally, you'd like to stay in the UK as you have family and friends here, plus I hate hot weather. Before the 2008 trust fund law change, you could've put into a trust fund (and pay the relevant tax) and that was that. You get to live in the UK with relative low tax and asset protection when you pass. But now with the 20% surcharge that's out the question. You could also go through the FIC route, but would you really have access to your funds if you really needed them back (lets say to buy another £1m property, or an expensive car)? the tax isn't great either as you pay corporation tax (25% soon) yearly. Foreign investors in the UK usually use the Non-dom status so avoid the capital and IHT problems i've listed above, but that isn't an option for myself as a UK citizen

Is the only option really to move out offshore? Are there offshore's with colder weather?

The UK has a 5 year period after you move offshore before your assets become IHT free. So, I was thinking of creating a Dubai company, and moving all the assets there for the 5 year period (as it becomes business property and out of reach of HMRC) before it becomes exempt. At the same time living somewhere in the Carribean. And then moving the funds to another offshore company (perhaps Caribbean or cyprus) for security and not to go Dubai every 6 months. Is this plan unrealistic? Does anyone know local solutions for this problem?

Russia is cold and the taxes are lower. According to google Russia also has no inheritance tax. You could live in Moscow very well with that kind of money. Though I wouldn't keep your money in Russia instead id look to Switzerland or Dubai for the banking end of it. If you want a cold low tax place to live though Moscow could be an option maybe!

 

[shitcoinbro]

If you want offshore with colder weather, close to home, consider Jersey or Isle of Man. Also- Ireland is an option- you should be able to get into their non-dom regime which works the same as in the UK

Also you can't really move assets like stocks/etf's into any company without selling them first and transferring the funds into the new company. You can't really change ownership of that without selling and re-purchasing.

 

[fastfloral]

The problem with jersey and isle of man, is that they're small islands and have expensive house prices. I might as well move to the Caribbean and pay for 24/7 AC if i'm doing that, works out cheaper in the end. Russia has income tax on capital gains and is unstable so I'd prefer Jersey or isle of man before that. I was hoping maybe someone can point me to an advisor or scheme to add a 'company tax wrapper' for the assets, so I don't own it legally. Surely these super rich celebrities and tycoons have schemes in place to protect their £10m+ assets whilst staying resident in European/ high tax countries ?

 

[JohnnyDoe]

The problem with jersey and isle of man, is that they're small islands and have expensive house prices. I might as well move to the Caribbean and pay for 24/7 AC if i'm doing that, works out cheaper in the end. Russia has income tax on capital gains and is unstable so I'd prefer Jersey or isle of man before that. I was hoping maybe someone can point me to an advisor or scheme to add a 'company tax wrapper' for the assets, so I don't own it legally. Surely these super rich celebrities and tycoons have schemes in place to protect their £10m+ assets whilst staying resident in European/ high tax countries ?

I laugh when I see those cheap millionaires wishing to move offshore complaining about house prices and cost of life. Best strategy for them is “do nothing and hope”, which works well statistically.
In this particular case, I would suggest to buy a nice fast boat, and move to Sark. Whenever you need something from the mainland you can be there in minutes by flying on the water at 70+ mph. Caveat: such boats are expensive and thirsty. But a millionaire isn’t supposed to check mpg.

Second option: move to one of the many cold cities in Italy (for example Livigno) and pay the €100k flat tax, which is lower than the IOM one.

 

[Martin Everson]

Is the only option really to move out offshore? Are there offshore's with colder weather?

Yes and Ireland as a non-dom as mentioned.

So, I was thinking of creating a Dubai company, and moving all the assets there for the 5 year period (as it becomes business property and out of reach of HMRC) before it becomes exempt.

Please read below thread on using Dubai companies fully.

UK Inheritance tax (+offshore investments)

You wrote: "inheritance tax will be due on US ETF's to US also if value exceeds $60k" (by the way, you can completely avoid this by buying Ireland-domiciled ETF's instead) I wrote: "Doesn't apply (or only to a much, much smaller degree) if you're tax resident in one of these countries"...

www.offshorecorptalk.com

With no substance in Dubai your structure is reported to HMRC by Dubai automatically each year etc. See below.

Twelve no/low tax countries share data on companies with no substance with UBO's country

Since March 2021 twelve countries now automatically share information on companies with no economic substance and where beneficial owners are non-resident. I think non-resident folk with companies in the below countries may be in for a letter from their tax man. Anguilla Bahamas Bahrain...

www.offshorecorptalk.com

Russia has income tax on capital gains and is unstable so I'd prefer Jersey or isle of man before that.

Forget Jersey and in general channel isles. See what I wrote about Jersey below.

Euro Pacific Bank - Peter Schiff Banked Known Criminals, Tax Probe Claims

As mentioned in another thread, EPB terminated my account in about July. Did they give you a reason for that ? Was it because you didn't provide documents proving you are paying your taxes maybe ?

www.offshorecorptalk.com

 

[fastfloral]

Yes and Ireland as a non-dom as mentioned.



Please read below thread on using Dubai companies fully.

UK Inheritance tax (+offshore investments)

You wrote: "inheritance tax will be due on US ETF's to US also if value exceeds $60k" (by the way, you can completely avoid this by buying Ireland-domiciled ETF's instead) I wrote: "Doesn't apply (or only to a much, much smaller degree) if you're tax resident in one of these countries"...

www.offshorecorptalk.com

With no substance in Dubai your structure is reported to HMRC by Dubai automatically each year etc. See below.

Twelve no/low tax countries share data on companies with no substance with UBO's country

Since March 2021 twelve countries now automatically share information on companies with no economic substance and where beneficial owners are non-resident. I think non-resident folk with companies in the below countries may be in for a letter from their tax man. Anguilla Bahamas Bahrain...

www.offshorecorptalk.com

Forget Jersey and in general channel isles. See what I wrote about Jersey below.

Euro Pacific Bank - Peter Schiff Banked Known Criminals, Tax Probe Claims

As mentioned in another thread, EPB terminated my account in about July. Did they give you a reason for that ? Was it because you didn't provide documents proving you are paying your taxes maybe ?

www.offshorecorptalk.com

Ireland sounds interesting, however they probably won't let you off the hook that easy!

I laugh when I see those cheap millionaires wishing to move offshore complaining about house prices and cost of life. Best strategy for them is “do nothing and hope”, which works well statistically.
In this particular case, I would suggest to buy a nice fast boat, and move to Sark. Whenever you need something from the mainland you can be there in minutes by flying on the water at 70+ mph. Caveat: such boats are expensive and thirsty. But a millionaire isn’t supposed to check mpg.

Second option: move to one of the many cold cities in Italy (for example Livigno) and pay the €100k flat tax, which is lower than the IOM one.

If you buy a £2.5m Jersey home instead of a £1m Carribean home, you've lost £1.5m in future investment income, could be 60k+ a year in lost revenue from stocks. Plus the cost of living is much higher, so it really adds up!

 

[Martin Everson]

If you buy a £2.5m Jersey home instead of a £1m Carribean home, you've lost £1.5m in future investment income, could be 60k+ a year in lost revenue from stocks.

Did you even read what I wrote in link I sent...lol? Buy a Jersey home??????? Below is what I wrote in link about Jersey.

For example with Jersey there are restrictions on where you can live and what you can do for work in Jersey. You need to have lived on the island for 5 years before you can start your own business and work for yourself unless you apply for a special business license that has a special permission which allows you to do so. The license is granted against a strict criteria with the main one being 'economic value' of the business you are starting to the island. This includes amongst other thing income of the business owner. It also includes local job creation and the level of those jobs and the wider benefit to the island such as community engagement, Corporate social responsibility and forced use of local firms for professional services. To even get a license it is expected you offer a salary level for any full time employee in excess of £72,000 per annum. You are also not allowed to buy property in Jersey unless you have lived there for 10 years or you have licensed permission attached to your business license. The license permission if you do get it in end is only valid for 3 years and can only be renewed if you met the agreed criteria of the business plan you submitted. There are other schemes for residency for digital sector but as I said avoid this BS.

So I repeat do your research before looking at any channel island as they are protectionist states. If you have done your research on Isle of Man and you found no crazy hidden restrictions like the above then all is good. Move there freely. But if you don't do research and find out about restrictions later then its your own fault.

 

[sonato]

If you want offshore with colder weather, close to home, consider Jersey or Isle of Man. Also- Ireland is an option- you should be able to get into their non-dom regime which works the same as in the UK

that's pretty good suggestion. I see someone has a house for sale in the Bahamas, that may be a better choice.

 

[fastfloral]

Did you even read what I wrote in link I sent...lol? Buy a Jersey home??????? Below is what I wrote in link about Jersey.

Yes, i did. Just hypothetically speaking if it was possible. They've got a HNW clause for a reason

 

[JohnnyDoe]

that's pretty good suggestion. I see someone has a house for sale in the Bahamas, that may be a better choice.

The house has A/C but this guy wants a cold climate. It won’t get any colder that 17 degrees inside and it will be 23-30 outside.
He will spend less with a house in Livigno, Italy and the €100k flat tax. -30C in winter is possible, and rarely over +20C in summer.

 

[CyprusLawyer101]

Also you can't really move assets like stocks/etf's into any company without selling them first and transferring the funds into the new company. You can't really change ownership of that without selling and re-purchasing.

Thats not true actually. It is possible to move such assets from one ownership to another where you still maintain control. I have done it already for cients on two occassions.

 

[JohnLocke]

Thats not true actually. It is possible to move such assets from one ownership to another where you still maintain control. I have done it already for cients on two occassions.

what entity (i.e. Cyprus LTD - Trust, Foundation, complete different? ) are you using for this, just briefly explained?

My advice is, listen to what @Martin Everson says, he is right in many things and is well informed about the topics he comments on.

You may consult some of the service providers around here for additional and different options which may help you i.e. @CyprusLawyer101 and more...