using an offshore company ?

[2uk]

No, as an owner/operator the company is deemed to reside where you do (unless you are not the managing director and not a major shareholder).

I own a UK Ltd. company and have been working outside the UK for years. In each country I have worked the local accountant has told me that if I become resident then so does my company. UK tax law is the same.

Those countries that do not recognise our owner/worker setup tax you on the companies entire income as personal income.

I am not qualified to give this advice.

I do not appreciate your response. I am giving you the benefit of my experience, which you asked for. If intend to question the validity of my response then at least tell me on what you base your question.

I am not questioning your experience and thanks for the information. All I know is that there are no so many offshore regitered businesses for nothing.

[2uk]

Paying someone who knows is always a good idea.
They are going to tell you that a company is taxed where ever it is resident. By that they mean where the majority of directors and/or shareholders are resident. Its a bit complicated, but major corporations are so spread out it is easy to accept they are resident where they are registered.


.

If I operate in the UK, but my Ltd is registered in a tax heaven , then how the HMRC will figure the taxes that I need to pay to the HMRC ? .

I was told that the opposite is true ( you shouldnt pay tax in the UK ).

I don't know if the UK has a different approach.

[DaveB]

It all depends on your tax residency status. You company will pay corporation tax or it's equivalent in the contry in which it is registered. You will pay income tax and other personal taxes in the country in which you are deemed to be tax resident.

For the UK the rules are complex, and your position will depend on the facts. But the main rule is broadly that you are UK resident if you spend 183 days or more here in a tax year, or after four years your visits average 91 days or more over those years.

If you work in the UK and are deemed to be tax residnt then you have a legal obligation to declare your income to HMRC for the purposes of determining your UK tax liabilities. Failure to do so can result in fines and / or a jail sentance.

You can find out all you ever wanted to know about it here at least from a UK tax payers point of view.

[lith]

Hm, what if it's in another country with a slightly beneficial double-tax agreement, and has another major shareholder (resident in the country) who has an active role in the company... say investing €s earnt by the company providing services to the UK

As long as the you (in the UK) pay all the correct income tax etc on the salary you're paid and don't sneak the company money undeclared back into the UK, you'd be safe from any fines/jail etc, right?
No good for short term but could work long-term... or am I totally on the wrong track here?

[tim123]

I am not questioning your experience and thanks for the information. All I know is that there are no so many offshore regitered businesses for nothing.

It's because there are lots of lemmings who believe the BS that they are fed by the *salesmen*.

People buy 'offshore' products based upon wanting to believe that they work. They work well for 'non-doms' for the rest of us, they don't.

tim

[tim123]

[QUOTE=2uk]If I operate in the UK, but my Ltd is registered in a tax heaven , then how the HMRC will figure the taxes that I need to pay to the HMRC ? .
QUOTE]

They will assess you, leaving you to challenge them in court with the proof that they are wrong.

tim

[meridian]

Hm, what if it's in another country with a slightly beneficial double-tax agreement, and has another major shareholder (resident in the country) who has an active role in the company... say investing €s earnt by the company providing services to the UK

As long as the you (in the UK) pay all the correct income tax etc on the salary you're paid and don't sneak the company money undeclared back into the UK, you'd be safe from any fines/jail etc, right?
No good for short term but could work long-term... or am I totally on the wrong track here?

If you're UK resident and domiciled, then you're on the wrong track. Regardless of whether or not you remit any earnings back to the UK, you're still taxed in the UK on your worldwide income, including salary and dividends paid overseas. The double-tax agreement then comes into play to give you a rebate for tax paid in another jurisdiction.

Overseas companies in a beneficial tax regime only really work if you're not domiciled in the UK and you don't remit any of the funds back to the UK.

[IR35 Avoider]

You company will pay corporation tax or it's equivalent in the contry in which it is registered.

It doesn't matter where in the world your company is registered, if it is managed and controlled from the UK it has to pay UK corporation tax. (The Lone Gunman has already pointed this out.)

In a recent case (I can't promise I remember all the details absolutely correctly) a UK resident was convicted of tax evasion and sent to jail when HMRC proved that the accountant in the channel islands who was the off-shore company's director really only did what the UK resident told him, which made the UK resident a shadow director, which meant the company was controlled from the UK, which meant it should have paid tax in the UK. (The accountant was also convicted.)

[lith]

and you don't remit any of the funds back to the UK.

That's the bit I'm getting at, if the funds stay outside the UK
You'd have a problem (legally) bringing the money back into the UK, but what if by the time you wanted to pay out the assets/cash from the company, you were no longer residing where the company was registered, and not in the UK?

For example, my gf is non-UK but still EU, I don't know details of tax where she's from (Slovenia) but pay in UK = good, living costs 'high', pay in Slovenia = low, living costs cheap ... so after some UK contracts to get enough €s there's always the possibility of moving over... kinda like a long-term pension plan?

[2uk]

Overseas companies in a beneficial tax regime only really work if you're not domiciled in the UK and you don't remit any of the funds back to the UK.

What I read from this is

1. " beneficial tax regime only really work if you are not domiclied in the UK , because UK has a special legislatation that will prosecute this system."

2. Other countries - say Slovenia may not have such a legislations and you might be able to save taxes ( that are due in Slovenia) , this was , if you were operating in Slovenia but not UK.

If I am domiciled in Iran But have an company that is registered in the Cayman, and I have 5 employees, contractors , that work in the UK, I am going to be taxed in Iran , the Company in the Cayman and the employees in UK , correct ?