The United Kingdom is also a tax haven for non resident individuals and investing in the UK property market through an offshore company can reap amazing tax savings!

The United Kingdom is an excellent location to invest in property – and through an offshore structure the tax liabilities can be reduced – particularly effective if purchasing the property – but also beneficial if transferring your existing property into an offshore ‘umbrella’ structure.

The property will be held in a tax effective jurisdiction (typically a British Virgin Islands or Isle of Man company) and the shares held in Trust for the owner. As the property is owned by an offshore company that is managed and controlled offshore – a number of tax benefits can be applied. The property can also be rented (upon application to the Inland Revenue as a non-resident landlord).

Such benefits of the structure include:

• Zero Capital Gains Tax – on the sale of the property no tax will be paid on the capital gain.

• Zero Inheritance Tax – the property would not pay any inheritance tax in the estate of the ultimate owner.

• Zero Stamp Duty – in certain cases stamp duties on the transfer of the property can also be mitigated.

Income tax arising from the rent of the property may also be reduced against interest paid on a mortgage and other deductable charges.

The structure is suitable for non-domiciled and non-UK taxpayer’s who wish to take advantage of the excellent return of rental income and the potential growth of UK property

The members of the Rolling Stones (Mick Jagger, Keith Richards and Charlie Watts) utilise the benefits of offshore Trusts to ensure they pay only 1.6 percent of all income earned. They keep 98.4 percent of all their income! (Including from the highest grossing performance of all time - This according to the Dutch documents recently published detailing their tax affairs and the offshore structures involved).

Fantastic news for them - but it’s not only the rich & famous that can utilise offshore structures to save tax. There are many opportunities for an up-and-coming business or moderately wealthy individual to minimise their tax requirements and protect their assets from litigation or economic instability.

While it may not be possible to reduce your tax bill down as low as 1.6 per cent (unless you become a tax nomad and exile yourself from your home country) it is entirely possible for people like you and me to have an offshore Company or Trust within a financial management strategy to reduce taxes, protect your estate
and protect your assests in a legal and confidential manner!

Large companies utilise offshore jurisdictions to maximise the profits of their shareholders whilst ensuring their prices are rock bottom for consumers. A number of supermarket chains have been critised for there methods of tax effective savings - whilst supplying their goods at reasonable costs for shoppers and employing many thousands of people within the country of sales.

Many high-tax jurisdictions such as the United Kingdom and Germany have tried to attract headquarters’ offices and functions using a concept called the ‘coordination centre’.
Originally pioneered in Belgium, it is now seen in many countries throughout the world. Essentially, the high tax country will allow a resident corporation to continue its functions outside the normal tax laws. It is then able to use functions such as cross border intra-group trading or’re-invoicing’ to escape any witholding tax or other taxes.

Taxation of coordination centres is ‘by agreement’ between the corporation and the host country,
and is usually minimal. This is one of the ways in which high-tax jurisdictions, which are nominally against low-tax areas, play the game themselves.

The UK Limited Liability Partnership (UK LLP) is an excellent structure suitable for worldwide trading and international business. The UK LLP allows for a real UK presence, with all the normal benefits of a UK legal structure and UK bank accounts – but with a tax effective solution to the profits.

The UK LLP is ‘fiscally transparent’ – meaning that the members of the Partnership (and not the Partnership itself) are taxed on any profits of the LLP. Therefore, if the members are incorporated in a low or nil tax jurisdiction, then the profits can be re-distributed according to the tax benefits of the jurisdiction.

The UK LLP is a proven and established structure ideal for maximising profits from International trade or business, whilst allowing for those profits to be kept in an offshore jurisdiction and invested or redistributed as you see fit.

The Isle of Man is the ideal location to register your Yacht or Ship due to its association with the United Kingdom and its favourable tax treatment.

Yachts and Ships registered in the Isle of Man will fly the ‘British Red Ensign’ which entitles the Yacht to UK Consular services and the protection of the Royal Navy. The Yacht will also enjoy zero rate of tax on shipping related activities and may reclaim VAT on purchases and expenses.

Benefits of registering a vessel on the Isle of Man include:

• A zero rate of tax
• No annual tonnage dues
• A low registration fee
• Attractive VAT arrangements
• Security of mortgages registered on the Island
• A Demise Charter Register, both in and out
• British Flag and support of British Consular services
• Flexibility in the requirements for registered owners including limited partnerships

Many types of Ships are accepted for registry – including Tankers, Gas and Chemical Carriers, Offshore Support Vessels, Container Ships, Cargo Ships and Passenger Ships. There is also the “mega-Yacht Code” which allows for commercial yachts over 24 metres to be registered.

Yacht and Shipping Management services extend to assistance with ad hoc projects through to providing the complete yacht management service. Care should be taken when choosing a Yacht Management company - as they will be responsible for your ‘baby’ and you need a company that doesn’t hassle you constantly - but also that you can contact, night or day, if a problem arises.

A popular jurisdiction due to its Common Law base and relative cheapness compared to other European trading nations. A UK company where trading outside the UK can be sheltered from UK taxation when acting in an agency or broker capacity.

The UK has now introduced the Limited Liability Partnership which provides the benefits of a partnership with the protective limited liability of a company. Whilst having corporate characteristics and legal capacity in its own right, trading income is taxed like a partnership. Therefore if owned by non-UK tax payers and has no source income it falls outside charge to UK tax.

The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, (UK) is located off the northwestern coast of continental Europe. The UK includes the island of Great Britiain (England, Scotland and Wales), the northeast part of the island of Ireland and many small islands.

In the British Virgin Islands it has long been fashionable to talk of the “twin pillars” of the Territory’s economy – tourism and financial services. The financial services are by far the more important. Nearly 50% of the Government’s revenue comes directly from licence fees for offshore companies, and considerable further sums are raised directly or indirectly from payroll taxes relating to salaries paid within the trust industry sector (which tend to be higher on average than those paid in the tourism sector).
As a British Overseas Territory, the BVI is made up of about 40 islands and keys (cays) located approximately 60 miles East of Puerto Rico in the Caribbean Sea. The BVI has gained a reputation as the world’s leading offshore corporate domiciles due to its effective regulation and efficient services. It combines a safe, politically stable environment with a suitable legislative framework developed with the financial community in mind.
The BVI offers one of the most popular and long established International Business Companies Acts in the world, with over 600,000 companies having been incorporated.
It has a zero tax rate, with no income, wealth, capital gains or estate tax for offshore entities.
The BVI has an effective regulation and a proven legal and court system based on the British legal system and English common law. There are also no exchange controls and the US dollar is the legal tender
The BVI boasts a modern communications infrastructure and easy access through excellent flight connections – which makes it a very pleasant holiday destination.

As a Crown Dependency the Isle of Man has i’s own Corporate Registry – which makes available a wide range of company structures at an attractive price. And from the 6th April 2006 they introduced an income tax of zero percent ( 0%) and no withholding tax on payments of dividends to shareholders. This make the Isle of Man company an excellent vehicle to save tax.

The Island has its own Income Tax and Customs & Excise services – both provide a very quick service to queries. It takes approximately one week to register with the VAT authorities and receive your VAT number.

The Isle of Man benefits from a special relationship with the European Union which allows for streamlined movement of goods between the Island and the Union.

The Isle of Man Government has a policy of offering good incentives to high-technology companies and financial institutions to locate to the Island. This seems to have paid off as there is an expanding knowledge base being attracted to the Island which fosters a entrepreneurial spirit. Finance now contributes to about 35% to the Manx gross national product.

The Isle of Man is undergoing a growth in economy due to the success of its financial services industry. Any Corporate services company have to be licenced by the Isle of Man Financial Supervision Committee – introduced to regulate Corporate Services on the Isle of Man and ensure a high standard of service and accountability.

The main activities of the finance sector are deposit-taking, asset protection and management, packaged investments such as unit trusts, life assurance and corporate management. Markets for these services are world-wide and the Isle of Man has built an exceptional reputation as a centre of excellence for expatriate banking. The Isle of Man is constantly innovating the service industry with its offering of Space Isle (catering to space insurances) and Yacht and Shipping management.

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