non-domicile tax status

[DimPrawn]

Look at setting up an off-shore (holding?) company which invoices YourCo large sums thereby reducing the tax it has to pay to zero. Then all your money is offshore and not subject to tax (assuming in a tax haven). However when you bring the money in the UK to spend it, it'll be taxable.

I know someone who claimed to be doing this, the off-shore Co invoiced HisCo for "management fees" or somesuch. Not sure how he got the money back into the UK though.

This is what all big co's do now the the HMRC take no notice.

Doesn't cost much to do.

I've heard of people having a credit card linked to the offshore account and simply pay for everything on that card, where the monthly balance is automatically settled by the offshore bank.

How clever this is I don't know.

[Cheshire Cat]

Sounds like tax evasion to me.

[meridian]

This is what all big co's do now the the HMRC take no notice.

Doesn't cost much to do.

I've heard of people having a credit card linked to the offshore account and simply pay for everything on that card, where the monthly balance is automatically settled by the offshore bank.

How clever this is I don't know.

This is exactly what Barclays have set up for me for nowt - two cards (one Sterling, one Euro) issued in the IoM, so any spend in the EU is paid for from the IoM.

For a UK resident your spend in the UK is deemed to be money remitted so is tax evasion if you don't declare it, but for a non-dom any spend outside of the UK is tax free.

[DimPrawn]

I wish my father was a bloody foreigner. This non-dom is a ticket to wealth. Tax free life!

[meridian]

I wish my father was a bloody foreigner. This non-dom is a ticket to wealth. Tax free life!

But then you'd have to support a crap football team.

Oh, hang on a minute....

[dude69]

I wish my father was a bloody foreigner. This non-dom is a ticket to wealth. Tax free life!

Not any more though, if you spend more than 7 years in last 10 in the UK they want £30k/year from you.

I actually qualify as non-dom, but £30k/year aint worth it.

[Likely]

Is anyone aware if any of the companies discussed on the site (Sanzar , MTM , Taxdesign ) offer "schemes" for non-doms ( as opposed to domiciled UK residents ) ?

[thezou]

Didn't want to start a new thread and this seemed like a good topic for my question:

I currently run a advertising company that mostly deals with US clients (1 bigger German account and 2 small UK ones (these only account for <5%)). Right now I got a limited company set up and pay myself a dividend of <35k pounds, the rest stays in the company and is taxed at 19% or so. Current Revenue is mid 7 figures with roughly half of that being profit.

As I'm sick of not being able to touch my money and don't particular want to pay close to 40% income tax, I've been weighing my options the last few months. The service I provide can be done from anywhere in the world and I got no direct employees (I work with contractors and freelancers only), so I've been taking a look at Monaco and Andorra the last few weeks.

However, as I'm a German citizen, I just realized that maybe the non-domicile status might help me stay in the UK. Please let me know if the following situation would be legal & realistic, I'll obviously talk to my accountant next week, but the guy that deals with international setups isn't in until later next week ..

Anyway, here it goes:

- claim non-domicile status (no property in the UK, property in Germany, German nationality, family etc, so I figure this should be no problem)
- set up a offshore company
- Clients pay the UK company
- Offshore company invoices the UK company for 90% off the profit or so
- UK Company wires the money to a non-uk bank account
- UK Company pays corporate tax on the remaining 10%
- UK Company pays me 30k pounds, which I pay income tax on
- I pay myself a further 35k pounds in dividends (tax free?)

Am I being delusional, or would this work? Or would this be considered tax evasion? I could also cut the relationship with the UK clients if that would help my setup, or fully pay taxes on those accounts.

Also, could I use the profits from the offshore company to buy real estate anywhere outside the UK?

Thanks a lot guys.