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Tax efficient business structure?

Tax efficient business structure?


I am a sole practitioner, acting for the usual run of the mill small businesses and tradesmen. A relative has asked for advice in setting up a new business venture. 

There will be three equal participants in the new business, two UK residents and one French resident. The new business will potentially generate a high income and the participants are keen to minimise their tax liabilities, if possible making use of an offshore structure. I have little experience of this area of tax planning and would not normally take on such work. However, the family connection means that even if I do not act, I would like to point my relative in the right direction. Does anyone have any tax planning suggestions or can you recommend a specialist firm to contact who will not charge the earth for advice?

Many thanks.


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By djw090
23rd Mar 2012 14:52

What are they intending to do with the profit and where will business be conducted?

If they need to spend it all and are therefore going to distribute it to the participants then offshore may well be a waist of time.

If the profit is going to roll up in the business untill they retire when they will ride off into the sunset and live on it then offshore may work for them.

If some want to do one thing and sum the other you may want 1 main entity and 3 "holding" entities. Think LLP with 3 corporate partners as an example.

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23rd Mar 2012 15:57

and where?

I think the first thing that needs to be established is where this business will be trading and run from. If the UK parties are both resident and domiciled in the UK, have no intention of becoming non resident in future, and the business will be carried out in the UK, then an offshore structure is unlikely to be relevant.

However, a UK company in which they could get Entrepreneurs relief may be a way forward, particularly with the increased limits.

I would be more than happy to help if appropriate - I specialise in this type of work - so feel free to PM me if you like.


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By Hansa
23rd Mar 2012 17:02


I agree with both the above replies.

Without knowing what the proposed business is and where it's customers/suppliers are based a generic "offshore" solution cannot be suggested,  Likewise the intentions of the 3 participants in the future.  France for example operates largely on a territorial taxation basis, and if the French end keeps his share of profits in the company he can expect to pay no French Taxes.

However the French pursue a very agressive "anti tax haven" strategy and it may therefore be worth considering a low (rather than zero) tax solution.

Like Mr Hodges, this is my area and a PM will be dealt with confidentially.

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