International Property Company

by **thodge78** on Wed Nov 25, 2009 12:31 pm

Hi I have a query which I hope you may be able to help with.

I am a UK domiciled and Resident individual. I have been exploring various options with regards to what is the best tax efficient structure in relation to receiving commission on property transactions in the UK.

I have explored a BVI company with directorship and address based in Leichtenstein, a company set up in Cyprus with directorship and address based in Cyprus, a UK company with an EFURB, sub trust structure and also a Hong Kong company. All options seem to be viable for tax planning if I were to be a shareholder in the company or be a beneficiary of a trust which held the company. However, I would really like advice on which is the best structure to go for.

Kind regards

Terry

by **thodge78** on Wed Nov 25, 2009 1:26 pm

The property is commercial property if that makes a difference.

by **orest_shambs** on Wed Nov 25, 2009 3:01 pm

I assume the properties are located in the Uk (right?). Where are the byers usually from? have you been workin as self employed? do you carry on your business from the UK?

all the above are relevant to get you an informed answer. If you remain in the UK and carry on the sale of the transactions from there you/your company will still be liable to tax in the UK and at the same time you will be taxed in the offshore jurisdiction.

by **thodge78** on Wed Nov 25, 2009 3:34 pm

The properties are located in the Uk. The buyers are a mix of offshore and UK buyers, but just for arguments sake lets say they are more UK. I have not been working as self employed as I have the deals in place but non have been completed yet, hence the reasoning for tax planning. I work in the UK and also overseas, but live in the UK.

I think we may have got the wires crossed regarding the sale. I merely find buyers for the properties and get a commission from the property owners for the sale.

by **thodge78** on Wed Nov 25, 2009 3:35 pm

would a UK advisory Company which advises on behalf of the offshore co help in any way?

by **Taxbar** on Fri Nov 27, 2009 4:44 pm

The so-called tax planning you have mentioned is tax evasion and not avoidance.

If the commissions are generated from your work and you are resident and domiciled here, then by assigning those commissions to a foreign Company and not declaring that income you would be caught by Sections 720 and 727 of ITA 2007.

These sections require that the income is treated as yours, as it arises.

There is also the Dimpsey v Allen issue where persons involved, ( including professionals involved in setting up and running offshore Companies) in such arrangements,were given prison sentences.
Those involved appealed to the House of lords and were unsuccessful.

You need to take good legitimate UK tax advice and avoid anyone who is encouraging you to commit tax evasion.

There are lawful tax shelters and structuring to reduce and avoid your tax liability.

Daniel Feingold
Senior Partner
STTP
info@stratax.co.uk
STTP