I've heard people mention that you can live half the year in guernsey and half in the UK to avoid income tax, is this true?
Living in Guernsey for half the year?
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Not true at all... I have lived in Guernsey and now Sark. You will have to severe most ties with the UK and you will be only allowed to spend 90 midnights per year in the UK. Also, Guernsey has income tax, it's a flat 20% but also has quite a high social tax (NI) so you can work on about 30% tax to the first 500K after that the NI caps out and it's the flat 20%. The big advantage is there is no Corp Tax so it's a good place to manage a company, but you need to be resident as you need︀ a resident director. I live on Sark which has zero income tax so a better︁ deal if you can make it work..
Ah, okay, so the rule still applies to Sark but not Guernsey gotcha,
Doesn't everyone then just open up LLCs and just use them like personal bank accounts?
Doesn't everyone then just open up LLCs and just use them like personal bank accounts?
The LLC is a pass through so at the end of the year in Guernsey the pass through would become income, on Sark there's lots of people with LLC's as you can't register a company in Sark. In Guernsey most people open a company, stock pile the cash in the company then run away to a tax free land to convert to personal when ready....
Okay so by pass though you mean that they just track it just like a personal bank account then right?
And most people just use Guernsey bank accounts as temporary 0% bank accounts? And then physically move to an actual tax haven when they need to spend it? Or do they move before the end of the financial year?
And most people just use Guernsey bank accounts as temporary 0% bank accounts? And then physically move to an actual tax haven when they need to spend it? Or do they move before the end of the financial year?
Lots of people amass wealth in companies, which then get covered into trusts therefore the wealth never really gets converted to personal. Others will use the money in the company to purchase property, and some will build up a pot in a Guernsey company and then move to a sandbox destination to liquidate the Guernsey company under zero personal tax. Lots of different ways to play it. Guernsey is a nice place to live and it's pretty easy but expensive as you can only rent or buy on the Open housing market so central London money. 35min flight back to LGW is good but can't︀ really fly anywhere but UK airports which is limiting. Overall there's worse places to live...︁
Unfortunately the Channel Islands are stuck in the British "rules and regulations" nonsense, which will make your life miserable and are slowly killing the islands.
For example, they are probably the only place in the world where you are not allowed to bring your pets with you on a private aircraft or boat:
"You can only bring pets to [the Channel Islands] using approved air or sea carriers and routes.
Your pet cannot enter [the Channel Islands] on a private aircraft or boat. You will not be able to land and your dog will having [sic] to be kept below deck at all times so it cannot escape. The harbour authorities may also require you to isolate your boat."
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For example, they are probably the only place in the world where you are not allowed to bring your pets with you on a private aircraft or boat:
"You can only bring pets to [the Channel Islands] using approved air or sea carriers and routes.
Your pet cannot enter [the Channel Islands] on a private aircraft or boat. You will not be able to land and your dog will having [sic] to be kept below deck at all times so it cannot escape. The harbour authorities may also require you to isolate your boat."
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So they move money from UK businesses to a Guernsey︂ LLC and then a trust in Guernsey and then to a trust in Cayman? (I'm︃ guessing by sandbox you mean like a 'full on' tax haven like Cayman, Bermuda etc)︄
Not a Guernsey LLC but a standard Guernsey company, once the company builds wealth then the owner can either use a trust to protect the wealth of the company or the owner moves from Guernsey to live in a true tax free country and cashes out all the equity in the Guernsey company to their own account in the tax free country. All very doable but it starts with putting boots on the ground and moving to Guernsey
Okay, gotcha, but why not start with a trust in either Guernsey or a tax-free country? Or have the trust own the Guernsey company and just send the money straight to the trust itself?
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