Legal or Not

Legal or Not

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Avoidance or Evasion

Can I get some tax advisers opinions on this scenario please?

Two Consultants trading as an LLP, LLP has them and an Irish Limited Company as members. The two human members take profit shares up to the personal allowance and the rest goes to the company. The Irish company is in turn owned by a UK company owned by the two consultants. The Irish company dividends it cash to the UK company which dividends it to the two gentlemen up to the basic band threshold. They don’t pay any UK tax.

Legal or Not?

Replies (7)

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By User deleted
24th Mar 2014 12:38

Legal

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Thanks (1)
Replying to lionofludesch:
By JCresswellTax
24th Mar 2014 13:58

Love it!

BKD wrote:

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Answer the question that is asked :)

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By taxhound
24th Mar 2014 12:41

residence of the irish company could be in the UK

But the residence of the Irish company could be in the UK if this is where management and control of the company is, in which case Irish co would be liable to UK tax.

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Replying to tushansu:
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By gde2005
24th Mar 2014 12:53

The Irish company should be

The Irish company should be managed in Ireland. Different Directors (wife/partner of LLP member) and they should be Irish Residents.
 

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By Steve Kesby
24th Mar 2014 12:50

Obviously...

.... the tax consequences are likely to be different from 2014/15 onwards.

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Replying to mr. mischief:
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By gmull
24th Mar 2014 12:54

What happens in this scenario in 2014/2015?

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By Steve Kesby
24th Mar 2014 13:14

Well the legislation's not been enacted yet...

... but there are provisions in FB2014 to deem a proportion (which might be as much as all of it) of the Irish companys' profits as profits of the humans, for UK tax purposes. I imagine the Irish will still want to tax the Irish company's full profits though.

It's also not entirely clear whether or not the dividend income would still be taxable on the individuals.

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