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Offshore parent company & AML

Offshore Parent company & lending money to UK Asociates

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I have a client who wants to set up a parent company in taxheven. the profits made by UK subsidiary will be transferred in the form of dividends to taxheven. The owner of the grroup owns other UK companies (outside the group mentioned above) which can be categoried as Associate companies for tax purposes.

This dividends will stay within the parent company & will be utilised to loan other UK associate companies - on which an armslength interest will be charged.

In this scenario, should i cosider anything in relation to "AML" and anything needs to be reported in the form of SAR.

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By Wilson Philips
18th Mar 2019 15:47

I suppose the first question that I would be asking is what they are seeking to achieve by setting up the overseas company.

Given that dividends from one UK company to another are usually exempt from tax, and that (in my experience) the costs of setting up and running a company in a tax haven are very often significantly higher than those of a UK company there would have to be some other financially-compelling reason for the proposed arrangements. But until you know what that reason is, I wouldn't have thought that a report would be in point.

You do mention that the other companies can be considered to be Associate companies - exactly what do you mean by that?

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