Reply to: Tax Planning

[expat]

No you are confusing residency with domicile. Fail.

http://www.hmrc.gov.uk/CNR/faqs_general.htm#2nr

Residency is very simple.

No, I'm not, actually. I know the difference, and I was talking about residency. The HMRC FAQs describe how you would normally become not resident and not normally resident, but the meaning behind the liberal use of the word "normally" is that this is how it happens if you do it in a way that they are OK with. And that usually means that you establish not being resident in the UK by becoming demonstrably resident somewhere else.

It is true on the one hand that, if you become resident in say Malta, and then you put in >183 days in a year (or an average of > 91 days/year over 4 years) then you will be tax-resident in the UK as well. But the converse is not true, that being in the UK fewer days necessarily means not being residet; if you are not resident anywhere then you remain resident here.

Domicile is irrelevant in this case, as far as I can see.

[DimPrawn]

Sorry Prawn, but you are leading this astray and it is far too important.
I do understand this is in general and is therefore liable to piss taking.

You can set up your comapny etc wherever you like but make sure you do the following.

1. Always consult a local tax advisor in country. Complete a local tax return. Pay what is due locally.
2. While still tax resident in the UK complete your tax return. Pay what is due in the UK.
3. when not tax resident in the UK but maintaining a home complete your tax return using the non tax resident section.

Be aware, as Blaster said, the German tax authorities took a very dim view of people set up in Cyprus. Some people went to prison. I was working in Belgium with a guy who had just left Germany and he was bricking it in case they came after him.
The Belgian tax man is moving in the same direction and it wont be long before all of Europe does the same.

Be sure of your status, be sure you pay the right amount.

Doesn't seem to worry Sir Philip Green.

[The Lone Gunman]

Sorry Prawn, but you are leading this astray and it is far too important.
I do understand this is in general and is therefore liable to piss taking.

You can set up your comapny etc wherever you like but make sure you do the following.

1. Always consult a local tax advisor in country. Complete a local tax return. Pay what is due locally.
2. While still tax resident in the UK complete your tax return. Pay what is due in the UK.
3. when not tax resident in the UK but maintaining a home complete your tax return using the non tax resident section.

Be aware, as Blaster said, the German tax authorities took a very dim view of people set up in Cyprus. Some people went to prison. I was working in Belgium with a guy who had just left Germany and he was bricking it in case they came after him.
The Belgian tax man is moving in the same direction and it wont be long before all of Europe does the same.

Be sure of your status, be sure you pay the right amount.

[BlasterBates]

Beware of international tax planing consultants.

You need to take advice from three different tax advisors. There is no way round this.

There are a bunch of contractors who've done jail time taking advice from international tax planing consultants....beware. If you work abroad with contractors most of em have been in trouble with the authorities at some point.

The reason you need to local accountants is because you're covered if they're registered tax consultants. If they're sitting in the Isle Of Man, you can't point to them when the heavies from the tax authorities come round.

[DimPrawn]

Cyprus? Hmm.

/goes to look at Cyprus.

And yes - it's going to be an arsehole to find a way of either (a) satisfying or (b) telling them to **** off to three (minimum) tax authorities.

You pay your international tax accountant to deal with the tax submissions to three countries.

Obviously this doesn't make financial sense if you are earning £50K a year.

http://www.taxresearch.org.uk/Blog/2...tax-avoidance/

Who knows if you do it right you might get knighted by Brown.

[BlasterBates]

Setting up a company in the Cayman islands is easy and the tax rate is 0%.

Cyprus (in EU) corp tax rate is 10%

oh yeah ...just like the guys in Germany, having a wail of a time in their jail cell.

I'd take advice from tax advisors in each country.

You may as well just take it cash and stick it under your pillow.

[Menelaus]

Setting up a company in the Cayman islands is easy and the tax rate is 0%.

Cyprus (in EU) corp tax rate is 10%

Cyprus? Hmm.

/goes to look at Cyprus.

And yes - it's going to be an arsehole to find a way of either (a) satisfying or (b) telling them to **** off to three (minimum) tax authorities.

[BlasterBates]

...err a simple phone call and the tax planning accountant will tell you what to do. I think not. This is complicated. If your working in three countries, you have three tax authorities to deal with. A lot of contractors assume that only the HMRC counts, only to find a German or Czech VAT inspector banging their doors down.

My experience is, it would be best to setup a company ir register with one authority and have it taxed there. You could probably setup an IOM co. but that raises the danger of three tax authorities investigating.

Depends on how much time you spend in each of these places.

[DimPrawn]

yes but then you pay the tax where the foreign company is set up.

The point is you have to pay tax somewhere.

UK tax rates generally aren't any worse than anywhere else anyway

I'm not in the UK so I don't have a thing about whether HMRC gets it. To me all tax authorities are the same, they're all tough b*stards that take too much money.

Yes you can setup a Czech company, do you really want to?

If you setup an IOM co. you might just end up fighting three tax authorities.

Setting up a company in the Cayman islands is easy and the tax rate is 0%.

Cyprus (in EU) corp tax rate is 10%

[DimPrawn]

Amazes me how people wriggle out of IR35 as if it's the end of their life, pay for insurances, have contract reviews, go to court, write to their MP's, sign petitions, etc, but won't make one call to a tax planning accountant to structure their affairs for overseas working to minimise or remove UK tax liabilities.

[BlasterBates]

The only UK income is personal (you are not living here so zero) and corporate (it's a non UK company so zero). Tax in UK = zero.

What you pay abroad depends on how you structure your business there. Many countries have zero or close to zero corp tax.

yes but then you pay the tax where the foreign company is set up.

The point is you have to pay tax somewhere.

UK tax rates generally aren't any worse than anywhere else anyway

I'm not in the UK so I don't have a thing about whether HMRC gets it. To me all tax authorities are the same, they're all tough b*stards that take too much money.

Yes you can setup a Czech company, do you really want to?

If you setup an IOM co. you might just end up fighting three tax authorities.

[The Lone Gunman]

It is the voice of experience. I can't believe you a making it so complicated.

Call the tax planning accountants. It's a few forms. Yes, for the 1st year you have to send a tax return, after the first year, you don't need to fill one.

You don't pay tax on you world wide income if the company generating the income is a non UK company and you are not resident.


Jeez.

Is it a non UK company?´He will remain UK resident for tax untill he has been abroad for more than one entire tax year. Too late for end 09, he will have to do end 2010 as will still be resident. Cant be non liable in UK till end 2011.
I am assuming he is freelance, self emp or working for own UK Ltd.

[DimPrawn]

That's not what I wrote...what I emphasized was you pay tax on any income arising in the Uk to the UK and income arising in Czech to the Czech authorities and so on.

The only UK income is personal (you are not living here so zero) and corporate (it's a non UK company so zero). Tax in UK = zero.

What you pay abroad depends on how you structure your business there. Many countries have zero or close to zero corp tax.

[BlasterBates]

No it doesn't. HMRC couldn't give a **** about your tax arrangements abroad. If tax is due here (the income is earned here) you pay it here. If you are non-resident and the income is earned abroad (your company is not a UK company), there is no UK tax.

They don't want to know if you are paying tax abroad. That's your problem not theirs.

That's not what I wrote...what I emphasized was you pay tax on any income arising in the Uk to the UK and income arising in Czech to the Czech authorities and so on.

[DimPrawn]

But they do want to know if you're not paying tax abroad. If they find that you're not tax resident anywhere, they can take the view that they'll have your ill-gotten gains then.

Wrong again.

Where do you people dream this tulip up?

Call a tax planning accountant!