Dual national about to get publishing deal. UK Co?

A family member living in Spain is about to get a reasonably large book deal in UK .

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A family member is about to get a 2 year book deal in UK ( and US). Shee lives in Spain but would consider moving back to UK if more 'efficient' for tax. I dont have all the details and do not have the tax knowledge to help. Her agent is saying she needs to become self employed in Spain to receive the payment which would incur 50% tax.

I am a 'general' accountant so this is obviously way out of my comfort zone and have been asked pretty 'last  minute'.

Should she set up company and get the UK deal  paid to that? 
Would she have to move to UK to avoid Spanish tax ( she is willing to relocate 
She will get further payments later on in deal
She may also sign deals in other european countries and US deal is also imminent?

Is it too late to do anything ( negotiations are at a late stage) as she has already earned the money in Spain? ( nothing signed)

I realise there is lots of complications but the essential question could she set up UK company for this deal to be aligned too? 

She has been literally  a struggling writer for years and has struck 'gold' hence the lack of planning...... 

 

Replies (7)

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By FactChecker
12th Mar 2024 20:56

As I'm sure you know, since you say all the potential permutations are "obviously way out of my comfort zone" ... your family member is to be highly congratulated, but the best support you can give her now would be to point her at an accountant with relevant experience.
You might be surprised at how fast such a professional can move if necessary (which won't minimise their cost) - but it would be a terrible shame if trying to cut corners resulted in her 'gold strike' being mis-handled to her detriment.

Frankly, she should no more rely on the suggestions of her agent (unless they happen to be tax lawyers in both jurisdictions as well as a literary agent - unusual to say the least) than to hope for pearls of wisdom from a public forum, where the quality of any advice is unknown and leaves the recipient without backup.

Good luck to her ... and to you in assisting her search, urgently by the sound of it!

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By Tax Dragon
13th Mar 2024 05:58

If you don't have the details or the knowledge, why are you even contemplating advising your relative to set up a UK company?* She's in a sector that's subject to rules that don't trouble your typical client and you could make things worse for her if you're not careful.

* I could have stopped that sentence at "advising".

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Replying to Tax Dragon:
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By paul.benny
13th Mar 2024 06:57

To be fair, OP is merely floating here the idea of a UKCo rather than advising it as a course of action.

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Replying to paul.benny:
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By Tax Dragon
13th Mar 2024 09:25

Then I fail to understand the point of this thread.

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By I'msorryIhaven'taclue
13th Mar 2024 08:48

Rule of thumb, Spanish taxes are higher than UK taxes. Given the immediacy of the deal, I guess your issues will boil down to whether she should contract via a newly formed UK limited company.

As the others have said, she'll need someone with UK tax expertise. But do marshal the facts first: for example, does your relative currently pay Spanish taxes, has she ever done so, for how long has she resided in Spain, does she own UK property or have any UK income.... line up your soldiers!

"Is it too late to do anything ( negotiations are at a late stage) as she has already earned the money in Spain? ( nothing signed)"
I hear a VAT alarm bell. Does the contract that's presently being prepared cater for VAT? Perhaps your Uncle Jason could offer you some pointers, if he should happen by.

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paddle steamer
By DJKL
13th Mar 2024 11:14

Get someone niche- years ago we had a client just doing his first book deal but before royalties started really flowing and the film deals/scripts had still to come.

Our man (well known up here now ) got punted by us on to a much larger London firm who then undertook all his planning. As the author has bobbed around the world re his location over the intervening near thirty years obviously he managed to rope in advice not only re UK royalties etc but presumably overseas residence- in fact some of his later books used these locations within the plots.

What I can mention is how fast international recognition can blossom so your family member should not delay going to a set of pros. Other thing is buy hardback first editions and get them signed, I made the rooky mistake of buying the paperbacks and getting them signed, strongly suspect they are worth much less. (must check where they are in the house)

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By jvenegas16
14th Apr 2024 19:38

The Spanish tax rates increase by brackets. So there will be more than one rate, and not all the income will be taxed at the same rate. Also, deductions need to be considered too. The amount she will receive is important in order to assess tax position.

You need to be careful with the advice given about having to become self-employed.

Is she tax resident in Spain?

More details would be needed.

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