Is offshore legal?

**Ivor1** · 25 May 2007, 14:46

Personally I wouldnt risk it, I know quite a few people who have had visits from the IR for such schemes and most had to pay up, combine this with the fact most schemes such as these charge massive fees 10%, so if it goes wrong it very expensive to get out of it

**cykophysh39** · 25 May 2007, 14:48

Surely that money will be taxable in the offshore country?

**offshore junkie** · 25 May 2007, 15:03

Originally posted by cykophysh39

Surely that money will be taxable in the offshore country?

Why would it if it was a legitament charge?

**tim123** · 25 May 2007, 15:10

Originally posted by offshore junkie

Why would it if it was a legitament charge?

Because the company that it's being paid into has no expenses, so every penny that's paid into it will be the company's profit.

It's usual for companies to pay tax on profits that they make.

tim

**offshore junkie** · 25 May 2007, 15:16

Originally posted by tim123

Because the company that it's being paid into has no expenses, so every penny that's paid into it will be the company's profit.

It's usual for companies to pay tax on profits that they make.

tim

But if the company that is invoicing you from the FORIGEN or OFFSHORE company for the service does not fall under UK law.

**cykophysh39** · 25 May 2007, 15:22

Originally posted by offshore junkie

But if the company that is invoicing you from the FORIGEN or OFFSHORE company for the service does not fall under UK law.

It doesn't matter if the UK government Cannot tax it, but I am sure Uzbekistan gpvernment would like to get thier hands on revenue.

**ASB** · 25 May 2007, 15:27

- If it is a legitimate service then something is consumed. Ergo there is no money to bring back. Sound more like the service he is purchasing is "we'll hide this money for you" since it finds it way back to him.
- Could reasonably be taken as remuneration from UK based work. Taxable in the UK.
- If the guy is not UK domiciled then there may be some opportunities for him. This probably wouldn't be one of them.
- Taxation in the destination country could be an issue. However Guernsey for example now has a 0% corporation tax rate. [And no you can't just go and nominally operate from there whilst resident in the UK because your company will likely gain UK residency].

It is possible you friend has discovered a scheme which is compliant with UK regulations in his particular circumstance. I find it very unlikely.

He's probably much more likely to get into real trouble for false accounting than tax issues - the latter normally only costs money to unwind.

**tim123** · 26 May 2007, 10:05

Originally posted by offshore junkie

But if the company that is invoicing you from the FORIGEN or OFFSHORE company for the service does not fall under UK law.

No-one said that it would.

there is still likely to be tax to pay

tim

**offshore junkie** · 27 May 2007, 02:18

Originally posted by tim123

No-one said that it would.

there is still likely to be tax to pay

tim

Here is the deal from doing some research on this. A company in another country that has no tax to pay invoices your uk company for a certain amount for services that you subscribe to. This is a legitimate UK claimable expense for a limited company.

That money is then moved off shore to the invoicing company bank account. Where is it taxable if the forigen country does not tax it? I agree if the person that has the UK company is a disclosed share holder than yes they would have to pay tax on worldwide income. But if they were a non disclosed share holder with the country's privacy laws being observed, then who would know if you were or were not a share holder of the off shore company? And if you received any income from that company?

That money could have been moved on to another account in another country and then vanish.

The only thing that is scary about the offshore industry appears to be the fact there are many sharks out there that will run off with your money! Not very appealing when you look at it that way.

Is offshore legal?