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Paradise Papers....on the cheap??

Can the man in the street do their own Paradise Paper tax avoidance??

Is is possible for the man in the street property owner to do a Paradise Paper tax avoidance scheme??

Eg...set up an overseas company [eg mauritius??]

Send all rental income to there

Appoint yourself as an 'investment adviser'

Spend the money??

What the cheapest way to do this???

 

 

 

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10th Nov 2017 15:43

How about

Set up company in Ireland

Pay rental into that

Take the cash out in Ireland

Don't pay Irish tax

Let the company fold ...with no cash in the bank

Repeat the entire process

I suspect it might be slightly illegal....!!!

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By Alex_T
to Cant Add Up
13th Nov 2017 10:50

If only!

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By DJKL
10th Nov 2017 16:03

Now does that work, surely rental income arising in UK is subject to UK tax (Corporation or Income)irrespective of residence of company owning same?

https://www.taxjournal.com/articles/corporation-tax-and-non-resident-com...

"A company which is not resident in the UK for tax purposes has generally been outside the scope of UK tax except in relation to the following scenarios:

If it trades in the UK through a permanent establishment (PE) – which is most typically a place of business but can also include a construction site or even an employee working here – then UK corporation tax will apply to any income and gains attributable to that PE.

Profits from dealing in or developing UK real estate as part of a trading activity has potentially been subject to corporation tax from 5 July 2016 following FA 2016, whether or not there is a UK PE.

Income from real estate situated in the UK has been subject to income tax.

Capital gains from the disposal of UK residential property held as an investment have been subject to non-resident capital gains tax (NRCGT) since April 2015.

A capital gains charge has also applied since April 2013 in respect of UK residential real estate where a company owns a dwelling that does not qualify for one of the reliefs (ATED related gain)."

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10th Nov 2017 16:06

OK then, if rental is excluded then either my consultancy money goes overseas or I guess I attach some IP to my consultancy and pay a licence [equal to all consultancy income?] overseas to the company that owns the IP

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By DJKL
to Cant Add Up
10th Nov 2017 16:25

I think permanent establishment might trip you up.

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10th Nov 2017 16:18

Eat Jaffa Cakes rather than biscuits.

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10th Nov 2017 16:44

Its very easy indeed.

Dont use an agent, don't advertise in anything traceable back to you.

Rents in cash, dont bank anything.

Anyone asks, we had some dodgy blokes in there, never paid up did they. Trashed the joint 'n' all, and i couldn't afford to fix it neither. me and my mate Barry been fixing up at the weekend end upt its taking us years, but its just ready now and look we ave our first tenants just in there now. We are going to declare it soon. Honest, but after the repairs, you know, no profit so not said nuffin yet.

Sweet as geezer as they used to say round like where i was dragged up.

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By DJKL
to ireallyshouldknowthisbut
10th Nov 2017 16:53

The catch re that is the join up with Council Tax records re who was in occupation, owner ends up picking up the tab unless can prove/demonstrate A N Other in situ.

Still, nothing a bit of forgery of leases will not cure until copies of utility bills requested and consumption considered in light of nobody having been there, honest guv; the hole being dug just got a whole lot bigger.

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10th Nov 2017 17:16

the most 'legal' way seems to be to set up Ltd co....fail to pay across vat/paye/CT...then let co go to the wall. There is a risk HMRC will come after director ....but no more than like any scheme....after all I am sure he took advice along the way and was doing all he could to stay within the law....and meet his (company's) obligations....

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10th Nov 2017 19:22

He'd be better of just taking (some) money cash in hand.

The oldies are the best!

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11th Nov 2017 16:21

Just a couple of problems, ignoring the suggested fraud of cheating the Public Revenue!

Have you reckoned the costs of establishing and running an overseas company, or the difficulties of opening a foreign bank account[no easy matter nowadays].

If rents are collected through agents, they will have an obligation to withhold tax on paying out to a non resident landlord[your proposed overseas company]- and strictly[not a word looming large in your question] if no agent is involved the tenant has an obligation to withhold tax if rent is paid other than through an agent to a non resident landlord.

If your consultancy income exceeds the exempt band for VAT [threatened to be significantly reduced in this month's budget] your non resident company could become embroiled in the delights of reverse charge VAT.

The full answer would be a book, if not an encyclopaedia

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13th Nov 2017 11:13

How about not using journalistic claptrap as evidence of aggressive avoidance, and wait until the courts have had a say.

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to SteLacca
13th Nov 2017 12:59

SteLacca wrote:

How about not using journalistic claptrap as evidence of aggressive avoidance, and wait until the courts have had a say.

Er if that's directed at me....then I'd say that its evidently not 'claptrap' and secondly it'll be years before the courts are finished having their say.

I'm simply looking for something that puts me and my £70k annual consultancy income [that I don't need to touch atm ] on the same standing as the big boys in the paradise papers...

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to Cant Add Up
13th Nov 2017 13:57

Well, with respect, apart from one isolated case, there has been nothing that's come out of the Paradise Leak to suggest anything shady. In fact, much is pretty humdrum.

Oh, unless you read the press, when kit all becomes an evil conspiracy leading as high as the Queen.

Of course, they all forget that the Queen pays tax voluntarily, and as I've said before, you can neither evade nor avoid that which is voluntary.

But, if you want to be on the same footing, by all means contact one of this (high priced) off shore consultancies and bung them a bob or two to get started.

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13th Nov 2017 14:46

I always thought that the costs around the schemes were so high that people only went into them if they earnings were big bucks.

In the Panorama program the actors on Mrs Brown's boys had fees of £150k were paid to Mauritius then loaned back.

So I suppose if you are saving full tax on that level of earnings the fees are maybe not so bad and that does open up to lower levels of income. So in answer to the OP I suppose you could do it for your clients with earnings of £100k +.

So maybe the cost of opening up a Mauritian company is not so bad.

I could actually quite fancy opening up a Mauritian branch as got to be warmer than Co Durham.

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13th Nov 2017 14:48

I know there was a movement [PR stunt to some extent really] whereby a village was setting up some IP and then looking for all the local shops to shift their profits offshore [just like Amazon etc]....

It got some good coverage on BBC but ultimately ran out os steam and not sure how far they got with it...

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to Cant Add Up
13th Nov 2017 15:59

That'd be Crickhowell.

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to Cant Add Up
13th Nov 2017 16:48

A quick Google search and going rate for setting up a company in Mauritius is about £1500, and the average full annual costs is about £12k so if you pay more than that in tax its a winner.

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to Glennzy
13th Nov 2017 17:57

It is only a winner if :-
a) you ignore the provisions of ITA 2007 s.720,
b) you can persuade HMRC that the Mauritian company is not managed and controlled in the UK],
c) you are happy for the Mauritian company to retain its profits,
d) the Nominee[?] Directors are happy to avoid paying UK income tax on he Rental income and if....
z) you ignore all the above when filing your SA100.

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