Work in 0% tax region and drain my Ltd?

**vhadiant** · 5 September 2008, 08:18

Originally posted by Olly View Post

Obvious flaws to this cunning plan?

Finding a job & residency in a 0% tax rate country?

**Emigre** · 5 September 2008, 08:27

Originally posted by Olly View Post

What with IR35 investigations, company tax on any of the restricted investments I can make with my Ltd's assets and no guarantee drip feeding residual dosh out when I retire or winding up and taking tapered capital gains tax will be around when the time comes I'm frankly a bit worried.

I use a tax scheme devised by Montpelier in IoM (see BN66 thread!). However, they are international tax advisors and I know, at least a few years ago, they had a scheme for getting money out of limited cos. PM me if you want a contact name.

**ASB** · 5 September 2008, 08:32

Originally posted by Olly View Post

What with IR35 investigations, company tax on any of the restricted investments I can make with my Ltd's assets and no guarantee drip feeding residual dosh out when I retire or winding up and taking tapered capital gains tax will be around when the time comes I'm frankly a bit worried.

Sooooo.......

How about I go work somewhere sunny and tax free, become non-resident by staying out April to April and then pay or dividend myself what's left in my Ltd?

Obvious flaws to this cunning plan?
Should it be a massive dividend or Wages?

Ta very much like.

Should probably be OK but:-

If you get to be non resident and are controlling the company then HMRC might decide the company is. This is probably not such a good thing because if they do this then there is a nasty thing called the "exit charge". You can read up on it on the HMRC website but basically you will get charged CT on the retaiined profits at the point the company becomes non resident. Don't know how it actually works in practice with a one man band though.

If you decide to go the winding up route and pay capital distributions and use the CGT exemption then you are fine, provided you don't become resident again in 5 (or is it 7?) years. In this case they can become chargeable (or partially chargeable) to CGT on return to the UK.

**seadog** · 5 September 2008, 09:03

Originally posted by Emigre View Post

I use a tax scheme devised by Montpelier in IoM (see BN66 thread!). However, they are international tax advisors and I know, at least a few years ago, they had a scheme for getting money out of limited cos. PM me if you want a contact name.

I also used a similar Montpelier scheme to take money out of a company at reduced ratres.

The scheme failed and the whole exercise cost us about £100k in extra tax rather than just leaving the money in the company and taking dividends in the usual way

**Olly** · 5 September 2008, 09:14

ok - related to this

Related to this then..

Why can't I stop being director of my current Ltd and just be a badly paid employee and 100% share holder?
Transfer control to my parents (my father's already Secretary)

My accountants said this would be seen as tax evasion but there must be a variation on the above that keeps control of company in UK and avoids "exit charge" ?

**ASB** · 5 September 2008, 09:34

Originally posted by Olly View Post

Related to this then..

Why can't I stop being director of my current Ltd and just be a badly paid employee and 100% share holder?
Transfer control to my parents (my father's already Secretary)

My accountants said this would be seen as tax evasion but there must be a variation on the above that keeps control of company in UK and avoids "exit charge" ?

It's a close company. So it's all about control, you wouldn't really be giving up control. Just a shadow director. I'm not saying your company would become non resident, just that the possibility exists and if it does then there are implications. If a company becomes non resident in the UK and resident in a country with which we have a DTA then normally I believe only one company will have the taxing rights.

Ultimately you can probably achieve what you want but it will no doubt depend on where you and/or the company become resident, that countries tax system and the DTA in place. Thus it is important to figure out both before and after you migrate just what you need to do and when.

There are also likely implication between the company tax regime and your personal one.

Some links that might help:-

http://www.hmrc.gov.uk/manuals/cg2manual/CG42321.htm
http://www.hmrc.gov.uk/manuals/cg2manual/CG42460.htm
http://www.hmrc.gov.uk/manuals/CG1manual/CG13430.htm

Work in 0% tax region and drain my Ltd?