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Where Taxpayers and Advisers Meet

Mobile individual looking to minimize taxes

taxAdviserLondon
Posts: 2
Joined: Fri Jan 30, 2015 1:46 pm

Mobile individual looking to minimize taxes

Postby taxAdviserLondon » Fri Apr 06, 2018 8:16 pm

An individual (Spanish, non-dom) is mobile (can live anywhere in the world) and is looking to be tax efficient.

He is working for a company that has entities in the US and the UK. He is thinking about moving to work in a low tax juridiction (say Bahamas), and wonders how to structure his tax affairs so that he does not pay income tax:

1) If he works from the Bahamas for a UK company, will he owe UK income tax?
2) If he works from the Bahamas for a US company, will he owe US taxes?
3) Should he set up a firm based in the Bahamas, and then the US company pays that firm in the Bahamas?

Thanks!

bd6759
Posts: 3109
Joined: Sat Feb 01, 2014 3:26 pm

Re: Mobile individual looking to minimize taxes

Postby bd6759 » Sat Apr 07, 2018 11:45 pm

The answer to each of your questions is "maybe"

taxAdviserLondon
Posts: 2
Joined: Fri Jan 30, 2015 1:46 pm

Re: Mobile individual looking to minimize taxes

Postby taxAdviserLondon » Sun Apr 08, 2018 7:50 pm

Oh dear. Thanks for your response, are you able to elaborate a bit more? What criteria does it depend on?

Thanks!

GlobalTaxAdviser
Posts: 633
Joined: Fri Dec 05, 2014 1:18 am

Re: Mobile individual looking to minimize taxes

Postby GlobalTaxAdviser » Sun Apr 08, 2018 10:15 pm

Hi

I think with these types of questions and the complexity you are better taking professional advice from someone who is familiar with such setups.

Kind Regards

GTA

TaxAdviser2018
Posts: 26
Joined: Tue Apr 17, 2018 1:34 pm

Re: Mobile individual looking to minimize taxes

Postby TaxAdviser2018 » Thu Apr 19, 2018 11:42 am

In order to ensure that the individual in question is not liable to UK taxation, you should consider the Statutory Residence Test (SRT) - see https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-self-employed.

On the basis that they are not UK resident, then consider the contract of employment between the UK and the the jurisdiction where he is fiscally resident. If the employer has entities (including permanent establishments) in the USA as well as the UK, you should consider the US tax treatment on any income earnt.

Further questions to consider:

1: Where are the services that the individual is performing under the employment contract.
2: Are there any other employees who have similar circumstances and if so what are their employment terms.
3: Is the individual currently resident in the UK or another jurisdiction.
4: What tax implications are there in respect of the Bahamas?

If he is under a UK contract of employment, if he is to move offshore, will the contract be terminated and will he enter into a new contract.


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