Why I joined this forum

[Quantyquant]

Hi everyone!

I have been reading this forum for a few weeks, and decided to join to learn new things and ask for advice about my situation.

I am based in the UK but European citizen, currently employed, but also trading my own portfolio with Interactive Brokers.

I have been talking with some wealth management firm, recommending me to invest mostly in offshore bonds which would be sheltered from capital gain tax to some extent. So it got me thinking, I have this portfolio that I trade myself, why would I not be able to trade it under the name of an offshore company?

However I am not clear about the setup of offshore company, how it would work to manage it from the UK, or how I would be able to transfer the profit back while keeping an optimized tax path.

I understand Dubai could be an option, though it is probably amongst the most expensive to setup? How about Jersey, Guernesay and the likes as those are also 0% tax I believe? What would be doable in Asia as well, Hong Kong as an example?

I can't wait to start engaging in this forum to learn more and figure out my path forward.

Thanks!

 

[Martin Everson]

Are you a UK resident non-domicile?

You mean like a life insurance investment⁠ bond? Not like a normal OTC bond you buy and put in your portfolio on⁤ IBRK for example.

Because as a UK resident an offshore︀ company will be transparent for tax purposes. Meaning you will be taxed as if the︁ company did not exist and you earned the money directly. You will need to add︂ substance to offshore company to defeat CFC rules. HMRC don't play. There is a low︃ profit CFC exemptions but it is hard to comply with.

See what I said above.

P.S Welcome to the forum thu&¤#.

 

[Quantyquant]

Thank you very much for the reply! And for the welcome!

I am a UK‌ resident non domiciled, yes
I think the correct naming is an internation investment bond,⁤ which might be related to life insurance policies.
How does the UK sees the activity of the offshore company? What if the︃ profits are not brought back into the UK? Does that also depend on the jurisdiction︄ in which the offshore company is established?
I was under the impression that as a︅ non dom, any offshore profit would be excluded for tax purpose, but I may be︆ wrong.

Thanks a lot!

 

[Martin Everson]

As a non-dom if place of management, control and operation is outside the UK‍ and money is not remitted then you are not taxed if you opt for the⁠ remittance basis that year.

No tax then.

No.

Not in all︁ cases. Offshore profits even if not remitted and where offshore assets have UK situs will︂ be considered a remittance and taxed. For example using an offshore broker to buy UK︃ stocks and hold offshore is considered a remittance and any profit etc is fully taxable.︄ Hence why for example banks like UBS and CS in Switzerland have lists of investments︅ suitable for UK non-doms that avoid the situs issue.