Off-shore company

Off-shore company

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A potential new client has approached me saying that he wants to set-up an off-shore company that will trade with a UK-based branch.

At the moment that is all the info I have until I meet him, but why would he want to set-up this arrangement?

This is the first time I've come across this in practice and would be grateful for some assistance.

GC1

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By AnonymousUser
03rd Jul 2008 22:02

A few comments
If the offshore company is trading the purchase of the company would be to ring fence that income and keep it out of the UK tax net. The UK branch would be taxed on its income. The branch might only be a representative office only with little profit. I would expect you client to non UK resident.

You will need to establish if the offshore company's central management and control is actually in the UK. which may not be easy to do. You need to ask questions about directors visits to the UK, domicle, ordinary residence etc.

I have dealt with a few situations like this. Seems to have been popular in the past with Americans especially if there is a holding company in Deleware. If your client is one of these you need to check up on the current US stituation as the US is trying to block the" double dip" as it is called

My current case is someone who is taxed on the remittance basis and he has a branch in the UK but with little profit.

You may have to be up to speed with the recent changes in the budget for nom doms (tby the way the HMRC website is unclear on a lot of the issues)

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By The Minion
02nd Jul 2008 09:21

Be careful
If you are not familiar with this kind of thing it will come back and haunt you.

In the past i have simply referred clients like this to an IOM accountant so that they can explain exactly what is involved and what they must and must not do. THey can also set up any company/trust etc.

Basic rules i work by are, it is likely to be a problem if

1. It is a one off situation for you.
2. It involves agents
3. It involves international
4. It involves large sums

3 out of four from what you have said.

You can always deal with any UK aspects, if it is legit the client wont thank you for setting it up incorrectly. If it isn't you have passed the poisoned chalice to someone else...

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