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8 figure crypto exit strategy - UK edition
- Thread starter oiernfoiuebnf
- Start date
Please be aware that 5 years outside the UK is not quite enough. You need to spend greater than 5 tax years outside the UK. So that could be:
* 6 full tax years as non resident
OR
* 5 full tax years plus any length of split year treatment (even 1 day) immediately before or after
I therefore recommend you try to achieve split year treatment this year, in order to have the option to move back to the UK a little sooner in the future.
Also, for Jersey, if you are aiming to achieve 'entitled' status, you generally can't be absent from the island for more than 6 weeks in total per year.
Otherwise your plan seems good. Jersey is a lovely island and, as you say, if you get bored, you can move on again.
* 6 full tax years as non resident
OR
* 5 full tax years plus any length of split year treatment (even 1 day) immediately before or after
I therefore recommend you try to achieve split year treatment this year, in order to have the option to move back to the UK a little sooner in the future.
Also, for Jersey, if you are aiming to achieve 'entitled' status, you generally can't be absent from the island for more than 6 weeks in total per year.
Otherwise your plan seems good. Jersey is a lovely island and, as you say, if you get bored, you can move on again.
I’ve seen this topic discussed a lot in other forums as well. Is it not 5 years? From: Tax if you return to the UK
See the following link:
https://www.gov.uk/government/publi...rary-non-residents-and-capital-gains-tax-2021
One of the conditions that makes you a "temporary non resident" is:
"The total of the ‘residence periods’ that were not ‘sole UK residence’ did not exceed 5 years in length"
Therefore, 5 years is not enough. You must exceed 5 years. Thus, you need 6 tax years or 5 years + at least 1 day of split year treatment.
Various accounting firms have published guidance that confirms this. (But I would be interested in any other info on this topic if anyone has any.)
https://www.gov.uk/government/publi...rary-non-residents-and-capital-gains-tax-2021
One of the conditions that makes you a "temporary non resident" is:
"The total of the ‘residence periods’ that were not ‘sole UK residence’ did not exceed 5 years in length"
Therefore, 5 years is not enough. You must exceed 5 years. Thus, you need 6 tax years or 5 years + at least 1 day of split year treatment.
Various accounting firms have published guidance that confirms this. (But I would be interested in any other info on this topic if anyone has any.)
Assuming you're still resident for 21/22 and you don't claim any split year treatment in the years of departure or return, you would need 6 full tax years as non resident, i.e. 22/23, 23/24, 24/25, 25/26, 26/27, 27/28. You would then be safe to go back on 6 April 2028.
Here's some guidance that confirms this:
https://www.mauriceturnorgardner.co...th-absence-required-achieve-non-uk-residence/You can find similar articles by other accounting firms.
It would be better to claim split year in the years of departure and return, then you could leave today (22 Oct 2021) and safely return on 24 Oct 2026.
Thanks for the info on the 6 rather than 5 years, I hadn’t come across that yet. I was hoping to do a clean break at the end of the tax year in April because applying for split year is a bit more of a hassle. However with this point as well as the fact it could help if I wanted to sell some crypto prior to April next year (if the market goes crazy for example) then it seems worth it to do split year. I’ve already been out of the U.K. for nearly 2 months and will be going straight from abroad to jersey in April anyway.
I won’t be trying for entitled status, I’ll only be registered/non qualified and will have to take the bad accommodation that is available. I only plan to stay in jersey for 2 months a year during the summer so it’s not too bad, the rest of the time I’ll be either travelling abroad or for less than 2 months I’ll be in the U.K. (I’m going to make doubly sure that HMRC sees my centre of life is more in jersey than it is in the U.K.).
The best part of jersey other than it’s simplicity is the 1 day tax residency rule as long as you keep a flat available as I really don’t want to be tied down anywhere for 6 months a year to remain resident. I hope when they change it next year (which they are) it won’t be too many days.
so in Dubai the local banks do not easily accept crypto, the UAE branches of foreign banks also do not easily accept crypto and the only "solution" is foreign private banks? and in the last case it has to be over 1M and you have to invest with the private bank so the funds are not available for active management?
What about opening offshore accounts in crypto-friendly jurisdictions like Gibraltar, Jersey, Lichnenstein? Is UAE address acceptable for the banks are is that a struggle as well?
I’ve read this a lot on this forum, how it’s not a straightforward process to be able to send fiat from a crypto exchange to a Dubai bank account. With the only option requiring sort of middle man, which sounds dodgy to me. I’ll be setting up bank accounts in jersey, in uk banks but which have jersey subsidiaries. I’m not sure if a UAE address would be an issue but I think it’s always easier to open bank accounts and get large transfers through if you live in the same country as the account.
From my experience the Gib/Jersey options are good but you would have not spent enough time out of the UK to satisfy HMRC.
There is nothing taking you to the channel Islands but tax status. HMRC are not stupid they have the best tax evaders working for them in lieu of prison time.
Substance for the reason why you went to Gib/Jersey. You are moving your company there or a job.
The reason why UAE is so attractive is because of the ease of set up, it's in the middle between Europe, Africa and Asia and has great travel connectivity. Allowing you to easily travel and use that as a base.
The rules to obtain tax residency are very simple. Have utility bills and a salary paid to your personal account. Similar to Jersey you are only required to be there 1 day a year. The advantage of any other country UAE, Malta, Cyprus, even Portugal over the channel Islands is that HMRC is the same regardless of which island you are on.
If it was that easy to use the Channel Islands then the likes of Sir Phillip Green would use it.
There is nothing taking you to the channel Islands but tax status. HMRC are not stupid they have the best tax evaders working for them in lieu of prison time.
Substance for the reason why you went to Gib/Jersey. You are moving your company there or a job.
The reason why UAE is so attractive is because of the ease of set up, it's in the middle between Europe, Africa and Asia and has great travel connectivity. Allowing you to easily travel and use that as a base.
The rules to obtain tax residency are very simple. Have utility bills and a salary paid to your personal account. Similar to Jersey you are only required to be there 1 day a year. The advantage of any other country UAE, Malta, Cyprus, even Portugal over the channel Islands is that HMRC is the same regardless of which island you are on.
If it was that easy to use the Channel Islands then the likes of Sir Phillip Green would use it.
V
For leaving the U.K. HMRC has given very clear rules on how to inform them you are leaving and once you have left how many days you are allowed to spend in the U.K. in a tax year to remain non tax resident. It’s not a qualitative review like a lot of other countries in the EU for example, it’s a formula: do you have a) a house in the U.K. b) a wife in the U.K. c) a job or business in the U.K. d) have you spent more time in the U.K. this tax year than any other country e) have you been tax resident in the U.K. in the last 2 years. All of these “ties” reduce the number of days you can spend in the U.K. in any tax year without HMRC deeming you tax resident. Follow the rules and don’t spend too much time in the U.K. and they will not deem you taxable.
For entering Jersey as I said it’s easy for a U.K. citizen. I don’t have to set up a business, I don’t have to apply for a visa, I literally book a flight there and register online on jerseys tax authority website. And as long as I rent a flat I only need to spend 1 day each tax year there for them to deem me tax resident. The one day thing is I think almost unique in the world and why in 2022 or 2023 they will be changing it to between 15 and 90 days. Compare that to Dubai or nearly every other country where you need to spend 183 days each tax year officially to receive a tax certificate or be deemed tax resident.
Having said it’s a formula and I will technically be well within the rules just spending one day in jersey a year, to make an audit less likely I actually will be moving the centre of my life to jersey. I have no wife/house/job in the U.K., I haven’t been there for 2 months and won’t be there for much time at all in the 22/23 tax year. I’m also going to get a house in jersey, get a job in jersey and spend 3 months there at least next year. So both technically and subjectively I have moved to jersey, I’m not even bending any rules at all.
Dubai is probably the best for most other countries but for people from the U.K. who don’t want to spend 6 months in any one place, CI seem the best.
I’ve received extensive tax advice on this from a few different of the best advisors in jersey + the U.K. so am pretty confident of what I’m saying now.
Jersey as a channel island is not part of the U.K. and the tax authority there is not the HMRC, it’s the Jersey tax authority. It’s just easy to move there as a U.K. citizen.
For leaving the U.K. HMRC has given very clear rules on how to inform them you are leaving and once you have left how many days you are allowed to spend in the U.K. in a tax year to remain non tax resident. It’s not a qualitative review like a lot of other countries in the EU for example, it’s a formula: do you have a) a house in the U.K. b) a wife in the U.K. c) a job or business in the U.K. d) have you spent more time in the U.K. this tax year than any other country e) have you been tax resident in the U.K. in the last 2 years. All of these “ties” reduce the number of days you can spend in the U.K. in any tax year without HMRC deeming you tax resident. Follow the rules and don’t spend too much time in the U.K. and they will not deem you taxable.
For entering Jersey as I said it’s easy for a U.K. citizen. I don’t have to set up a business, I don’t have to apply for a visa, I literally book a flight there and register online on jerseys tax authority website. And as long as I rent a flat I only need to spend 1 day each tax year there for them to deem me tax resident. The one day thing is I think almost unique in the world and why in 2022 or 2023 they will be changing it to between 15 and 90 days. Compare that to Dubai or nearly every other country where you need to spend 183 days each tax year officially to receive a tax certificate or be deemed tax resident.
Having said it’s a formula and I will technically be well within the rules just spending one day in jersey a year, to make an audit less likely I actually will be moving the centre of my life to jersey. I have no wife/house/job in the U.K., I haven’t been there for 2 months and won’t be there for much time at all in the 22/23 tax year. I’m also going to get a house in jersey, get a job in jersey and spend 3 months there at least next year. So both technically and subjectively I have moved to jersey, I’m not even bending any rules at all.
Dubai is probably the best for most other countries but for people from the U.K. who don’t want to spend 6 months in any one place, CI seem the best.
I’ve received extensive tax advice on this from a few different of the best advisors in jersey + the U.K. so am pretty confident of what I’m saying now.
I just did a brief google on Sir Philip Green and looks like he’s in Monaco? I think for people like him Monaco is more glamorous, there are more billionaires like him there and the weather is better. It’s also 0 tax whereas Jersey has a 20% flat income tax (but 0% capital gains tax). Also when you’re older staying 6 months in one place is fine as well.
Sir Philip doesn't own anything legally. His wife does who is a resident and national of Monaco. So he could have easily used Gib/Jersey as his "home" but doesn't.
Yes they have their own revenue department but everything is processed in Belfast. The same place the fraud department is in. They will get you on some bulls**t technicality and the legal bill plus stress will kill you.
I would suggest you look at something completely out of the United Kingdom, Islands included .
Yes they have their own revenue department but everything is processed in Belfast. The same place the fraud department is in. They will get you on some bulls**t technicality and the legal bill plus stress will kill you.
I would suggest you look at something completely out of the United Kingdom, Islands included .
I’m not sure why they would get me on a technicality if I go to Jersey but not if I go elsewhere? The rules to become non tax resident in the U.K. are the same regardless of the place I’m going to. All that matters once I’ve satisfied those rules is that I have found a jurisdiction which regards me as tax resident there as well. To be honest as countries go the rule of law in the U.K./jersey in my mind is not bad. Then doing all the extra steps like closing all my U.K. bank accounts, removing any phone bills from a U.K. address, spending well under the allowed amount of time in the U.K. each year, then embedding myself in jersey is to make sure they don’t even have a reason to check all of the technicalities (which with tax advisors I would make sure all the i’s are dotted and t’s crossed).
Dubai just doesn’t seem that great an option:
- have to spend 6 months a year there to get the tax certificate
- have to set up a business in a free zone and deal with fees, accounting, renting office space
- regular banks don’t like crypto deposits so you have to go through a trusted middleman
- I feel like I’d be under MORE scrutiny from HMRC if I move to non-CRS, 0 tax Dubai rather than CRS low tax jersey which has a clean reputation in their eyes.
I understand your strategy fully, and it's a good one but just bear in mind that it's still the same people processing you regardless of what they say regarding being separated.
Also crypto cash out is not a problem in Dubai if you receive it from a licensed entity
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Not true. The only thing you have to know is that you HAVE to use your bank account like a normal person would do. Use your credit cards for grocery/online shopping, buy some stuff with installments (Even if you have the money). Get a loan or two and pay them on time, throw some money into a term deposit....etc. And Bam, the world is your oyster.
And No, you don't need a middle man, who told you that?. I Always receive money from Kraken in my Euro account in Dubai without a single issue (I'm talking about mid six figures), now this may be because of a lot of factors, for example 1- Euro transactions has less scrutiny than USD transactions. 2- the EUR correspondent bank for kraken is bank frick and it's based in Liechtenstein, and the banks love that jurisdiction, it's sophisticated and have the reputation just like Luxemburg, Singapore and Switzerland.
Now, once I knew that, All my crypto trading on unregulated exchanges get transferred to kraken, then I leave some on this exchange, and cash out the rest to my EURO account in Dubai.
Now could I send the money directly from binance (an unregulated exchange) to Dubai? maybe, but why in the world would I do that? when I have a solution that works, why would I take that risk?. That's why you have some people who have issues in Dubai and need a middle man/service provider to help them, because they don't know s**t about what works and what not, and even after they do, they do the complete opposite (like cashing out, without using the bank services at all) and then complain later about not being able to cash out or whatever.
So yeah, it's doable, you just need to do it right, or don't bother and look for other options.
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