Capital gains - happy to move to avoid

[Eurocash]

I will soon be involved a transaction which should result in a mid 6 figure capital gain.

I am about to acquire a website, and sell it within reasonably quick succession.

Both sides of the transaction are lined up and ready to go.

Even if the buyer I have in mind doesn’t proceed, I would still be confident of selling within 3 months.

My current situation:

- UK resident, living in UK
- Own a property in the UK, happy to sell it, and it would sell fairly quickly as it is in a desirable area with a buoyant market
- Have a single UK limited company, newly incorporated only a couple of months ago

The bottom line, and I’m not ashamed to say it, is that I want to pay 0 capital gains tax.

I am prepared to sell my property and move, preferably to somewhere in the EU, like Malta. Possibly even move before selling my property if required.

Soon (1-2 weeks) I will need to perform the purchasing side of the contract. I can’t delay that.

The onward sale will likely happen within 12 weeks.

If you were in my shoes, where would you go and what structure would you use?

My tolerance for Caribbean banks etc is very low. I want to use Wise for banking if I can’t get a physical bank opened in time, and I want the structure to be fully EU or EU+UK.

Any ideas folks?

This is a real situation btw

 

[SCHLOSSFINANZ]

your chances are Zero

 

[Eurocash]

your chances are Zero

My chances are zero based upon what?

My desired location?

Any chance you could add something constructive?

 

[SCHLOSSFINANZ]

you have a UK passport. You can't relocate to Malta because you need a RESIDENCE permit. You won't qualify for one and it takes time.
HMRC is not stupid thats circumvention what you do and your center of interest is still UK so - UK TAX

 

[JustAnotherNomad]

Can't you buy the website through a newly established company owned by your holding company and then sell the subsidiary instead of the website?
I don't really know the rules, but I guess that should be tax exempt even in the UK?
Obviously then the next question would be how to get the money out from the holding company without paying tax.

As for the property, there's usually no way to avoid tax on real estate. You may want to just speak to a UK-based accountant on how to best structure this to at least reduce the tax.

 

[Eurocash]

I in fact do qualify for residence in Malta, not sure how you can state that I don’t?

Agreed on timeline, it wouldn’t be granted in time regardless.

No-one is saying HMRC are stupid, and I’m aware of “the basics”.

What I am trying to do is figure out if there is a slightly more creative way of dealing with this. Even if there is a small chance of it being criticised or picked up later on by her majesty’s.

If I could just pick you up on the center of interest and what I do:

I currently live in the UK, however, my customers are mostly overseas.

In this transaction I would be buying from a UK company, yes, however the digital nature of the transaction is such that it really doesn’t matter where I am based and it would not be uncommon for such an asset to be purchased by a company outwith the UK.

 

[Eurocash]

Can't you buy the website through a newly established company owned by your holding company and then sell the subsidiary instead of the website?
I don't really know the rules, but I guess that should be tax exempt even in the UK?
Obviously then the next question would be how to get the money out from the holding company without paying tax.

As for the property, there's usually no way to avoid tax on real estate. You may want to just speak to a UK-based accountant on how to best structure this to at least reduce the tax.

The website can be bought by any new entity I form, yes. The seller does not care about this.

Regarding my property, just to be clear, I’m fully accepting of paying CGT on that, I was more alluding to the fact that I am willing to leave the jurisdiction fully and not retain property

 

[Eurocash]

you have a UK passport. You can't relocate to Malta because you need a RESIDENCE permit. You won't qualify for one and it takes time.
HMRC is not stupid thats circumvention what you do and your center of interest is still UK so - UK TAX

Please see my response a couple of messages above, I forgot to reply directly. Not looking for an argument, genuinely looking to weigh up the possibilities.

Just to be clear, it’s only this upcoming transaction I’m talking about. I know CGT will be paid on the house sale if I do that

 

[JustAnotherNomad]

In this transaction I would be buying from a UK company, yes, however the digital nature of the transaction is such that it really doesn’t matter where I am based and it would not be uncommon for such an asset to be purchased by a company outwith the UK.

I would investigate if you can just keep it all in the UK - a UK subsidiary owned by a UK holding company. Then you sell the subsidiary, which should be tax free, as far as I understand.
Then you "only" have to figure out how to get the money out from the holding without paying tax.

Ignoring all issues like place of effective management, CFC rules etc., I don't think a Maltese company could get you to 0% tax - as selling the website probably would not be a capital gain. So you'd be looking at at least 5% tax in Malta.
Unless you again sell the whole Maltese company, but then where's the advantage over a UK company? And you would need a holding company, unless you can change your tax residency before the sale (and even then, I don't know how it would work with UK exit tax).

Long story short - I would start with talking to UK-based advisors ASAP. There's a good chance you can structure this in a tax-free way even without involving offshore structures or anything.

Otherwise you could of course look into setting up an offshore holding (Malta, Cyprus, Isle of Man, Gibraltar, ...) and have that own the subsidiary, but then you'd probably in CFC or tax fraud territory. Or if you want to do that by the book, then it would at least be very expensive, potentially more expensive than any tax you'd be saving.
So I'd say start by talking to UK tax experts. Or maybe Maltese lawyers who are experienced in UK tax law.

 

[CyprusLawyer101]

Use a double tier structure, Cyprus would work, finance the entities accordingly, buy the website on the lower cokpany, sell the lower comoany's shares ( free of capital gains) . You have to satisfy motive test and other anti avoidance rules of the UK. CFC rules shouls be manageable. I could have a look, let me know and we can discuss further in DM.

 

[JustAnotherNomad]

Quick Google search... Seems like the UK doesn't have exit tax on the individual level, only on the corporate level.

Couple of things I could think of:

a) Set up an offshore holding with some substance. Maybe outside Malta, so you can reuse it to get the 5% CIT in Malta later.
Cyprus, Gibraltar, not sure what would work best for this. Make sure it's not a CFC in the UK.
Set up a subsidiary that will buy the website. Move to Malta. Sell the subsidiary, cash out.
CFC rules will probably be the main issue here.

b) Sell part of the UK (holding) company to a family member who will stay in the UK for 1 GBP and make them a director, keep preferential shares. Set up another UK subsidiary, buy the website through it.
Sell the subsidiary, this should be tax free as far as I understood (SSE).
Move to Malta. Since the UK holding remains tax resident in the UK (since it's run by a family member), there probably wouldn't be any exit tax.
Once you have achieved a tax-free status for yourself, distribute dividends from the UK holding.
Oh, wait, it seems like this might not qualify for the SSE...

c) As far as I understood, the tax year ends in the next couple of days. Maybe you could move out before the end of the tax year?
I would explore moving to Malta on a tourist visa. As far as I know, the UK doesn't care about your residency status in the new country, they only care that you have cut your ties with the UK.
I guess you wouldn't be able to sell your property within 2 days, but maybe it would be enough if you vacate it and rent it out to someone, so you can no longer use it yourself? Which would buy you time to sell it.

Just off the top of my mind. You should speak to a qualified advisor, this is just intended as inspiration to get you started.

 

[Eurocash]

Use a double tier structure, Cyprus would work, finance the entities accordingly, buy the website on the lower cokpany, sell the lower comoany's shares ( free of capital gains) . You have to satisfy motive test and other anti avoidance rules of the UK. CFC rules shouls be manageable. I could have a look, let me know and we can discuss further in DM.

Thanks for the response I’ll ping you a message shortly

 

[manukahoney]

Move to UAE or Cyprus right now (like today), before spending more tax days in the UK for 2025/26 tax year.
Spend less than 16 days in the UK tax year. You will automatically lose your tax residence.

That should do the trick, however I would also recommend cutting the ties in the UK:
- closing the UK corp
- renting out/selling the property
and most importantly - acquiring a new tax residency (60/90 days for Cyprus/UAE accordingly).

2025/26 tax year in the UK started on 6 of April, you are in perfect position to execute your plans.

 

[Eurocash]

Quick Google search... Seems like the UK doesn't have exit tax on the individual level, only on the corporate level.

Couple of things I could think of:

a) Set up an offshore holding with some substance. Maybe outside Malta, so you can reuse it to get the 5% CIT in Malta later.
Cyprus, Gibraltar, not sure what would work best for this. Make sure it's not a CFC in the UK.
Set up a subsidiary that will buy the website. Move to Malta. Sell the subsidiary, cash out.
CFC rules will probably be the main issue here.

b) Sell part of the UK (holding) company to a family member who will stay in the UK for 1 GBP and make them a director, keep preferential shares. Set up another UK subsidiary, buy the website through it.
Sell the subsidiary, this should be tax free as far as I understood (SSE).
Move to Malta. Since the UK holding remains tax resident in the UK (since it's run by a family member), there probably wouldn't be any exit tax.
Once you have achieved a tax-free status for yourself, distribute dividends from the UK holding.
Oh, wait, it seems like this might not qualify for the SSE...

c) As far as I understood, the tax year ends in the next couple of days. Maybe you could move out before the end of the tax year?
I would explore moving to Malta on a tourist visa. As far as I know, the UK doesn't care about your residency status in the new country, they only care that you have cut your ties with the UK.
I guess you wouldn't be able to sell your property within 2 days, but maybe it would be enough if you vacate it and rent it out to someone, so you can no longer use it yourself? Which would buy you time to sell it.

Just off the top of my mind. You should speak to a qualified advisor, this is just intended as inspiration to get you started.

Really appreciate your response. Definitely gets some thoughts going.

Your point about not structuring it in Malta makes sense as if I want to move to Malta, I need the transaction to happen outside of Malta otherwise I’d be in a very similar situation as I am in the UK if it was treated as local CGT.

Perhaps there’s something that could be done with a Cypriot company and Malta holding or mid co with UK still being active as a holding company

It would definitely be ideal if it could be done through a UK company but I just get the feeling that it will make things more difficult to prove if ever criticised- will definitely need to get advice on that

 

[jeffbean]

you have a UK passport. You can't relocate to Malta because you need a RESIDENCE permit. You won't qualify for one and it takes time.
HMRC is not stupid thats circumvention what you do and your center of interest is still UK so - UK TAX

That’s not true if your signed off and leave before the sale and get setup elsewhere you are not attached to the UK.

This isn’t like other countries in Europe where if you have kids or parents then taxes there.

 

[JustAnotherNomad]

Your point about not structuring it in Malta makes sense as if I want to move to Malta, I need the transaction to happen outside of Malta otherwise I’d be in a very similar situation as I am in the UK if it was treated as local CGT.

The typical non-dom setup in Malta is a local company with a foreign holding company.
This is what "everyone" uses to get to 5% tax.
I would expect that if you use such a setup and sell a subsidiary of the holding, even if it's a Maltese subsidiary, there should be no tax in Malta.
Malta obviously doesn't care about foreign holding companies, they escape Maltese CFC rules.
I would really worry more about the UK's CFC rules.

Perhaps there’s something that could be done with a Cypriot company and Malta holding or mid co with UK still being active as a holding company

It seems like the UK holding regime just isn't very attractive. So I probably wouldn't keep it long term.

Maybe you could also do something like this:
Sell the UK holding to an offshore holding (say, Gibraltar or Cyprus) for 1 GBP (pre-deal, so the company is still worthless). But you're still managing it from the UK.
Since it's sold while you're still resident in the UK, there is no exit tax.
Do the sale, transfer the money to the offshore holding. Close the UK company. Move to Malta. Cash out from the holding.
The main questions would be how you can avoid CFC rules in the UK if you own the offshore holding. It would probably be best if it wasn't owned by you.

It would definitely be ideal if it could be done through a UK company but I just get the feeling that it will make things more difficult to prove if ever criticised- will definitely need to get advice on that

Yes, definitely get advice on this. The SSE and exit tax would be my main concerns.

 

[manukahoney]

Don't complicate things. Leave the UK, spend less than 16 days, you are golden.
Move to the jurisdiction that doesn't have CGT and where you can get a residency quickly (UAE for example, can be elsewhere). That's it, no complex structure, no excessive reporting, nothing.

 

[Eurocash]

Don't complicate things. Leave the UK, spend less than 16 days, you are golden.
Move to the jurisdiction that doesn't have CGT and where you can get a residency quickly (UAE for example, can be elsewhere). That's it, no complex structure, no excessive reporting, nothing.

There’s a 4 legged reason I can’t go to the UAE otherwise I’d be on the next flight out.

I can get to Malta or Cyprus via plane with my dog without it costing an obscene amount

 

[Eurocash]

Use a double tier structure, Cyprus would work, finance the entities accordingly, buy the website on the lower cokpany, sell the lower comoany's shares ( free of capital gains) . You have to satisfy motive test and other anti avoidance rules of the UK. CFC rules shouls be manageable. I could have a look, let me know and we can discuss further in DM.

I don't think I'm able to DM you, could you send me a message?

 

[polonieth]

If you leave after April 6th, 2025, you’ll still be considered a UK tax resident for the entire 2025/26 tax year, and any capital gains made that tax year (even abroad) will likely be taxable in the UK...

Can't you buy the website through a newly established company owned by your holding company and then sell the subsidiary instead of the website?
I don't really know the rules, but I guess that should be tax exempt even in the UK?
Obviously then the next question would be how to get the money out from the holding company without paying tax.

As for the property, there's usually no way to avoid tax on real estate. You may want to just speak to a UK-based accountant on how to best structure this to at least reduce the tax.

OP won't have held the shares in the subsidiary for 12 months if he flips it immediately.

I in fact do qualify for residence in Malta, not sure how you can state that I don’t?

Which Maltese residence option do you qualify for?