Optimise my set up - UK entrepreneur looking for solutions in 2023

[leo8]

Hi guys - what would you do in my situation in 2023. Goal is to pay less tax, legally - already live a travelling/international lifestyle and paying mega taxes in UK.

- Have run my own performance/affiliate company for 10 years in UK - limited company, single director set up
- Make £500k - £800k profit for past 3 years
- Have £1,000,000+ invested in markets through a UK LTD company
- UK tax resident
- Have UK and EU passport
- Currently spent around 6 months in UK, 3 months in Europe for Summer (balkans mainly) and 3 months-ish in US due to family being based there
- No house
- Take a huge salary - higher rate tax payer

I'm fully versed in UK tax residency rules so the simplest solution for me would seem to be UAE company and residency and would only mean some small lifestyle adjustments (90 days in Dubai, under 90 in UK and continue with my current slow-travel lifestyle). However, it seems this set up is trending from easy to more complicated with filling requirements and potential taxes on the horizon.

Is there some solutions closer to home - even in the Balkans where I already spend a chunk of time? Whilst there are some attractive tax regimes - Montenegro, Bosnia - the tax residency requirements have always put me off looking into it further (187+ days).

Be keen to hear any other ideas for people who are in a similar position to me - thanks!

 

[Sols]

The easiest options are Malta and Cyprus. Move yourself and your businesses there and enjoy a much lower tax pressure. Cease being tax resident in UK. Shift business over from the UK entity to new MT or CY entities instead. Unless you want to avoid also MT and CY corporate tax, and set up a company in for example Isle of Man and Gibraltar. Technically tax evasion but MT and CY don't exert much effort going after wealthy foreigners. You may run into SOF/SOW challenges with banks in the future if your tax returns don't quite match your actual wealth.

Cyprus has the 60-day tax residence scheme which might be interesting for you. Spend 60 days per year there, don't be tax resident anywhere else, and you qualify for tax residence.

 

[Marzio]

Is there some solutions closer to home

What about Sark?

https://www.offshorecorptalk.com/threads/moving-to-sark-best-tax-structure-for-uk-income.35081/

 

[leo8]

The easiest options are Malta and Cyprus. Move yourself and your businesses there and enjoy a much lower tax pressure. Cease being tax resident in UK. Shift business over from the UK entity to new MT or CY entities instead. Unless you want to avoid also MT and CY corporate tax, and set up a company in for example Isle of Man and Gibraltar. Technically tax evasion but MT and CY don't exert much effort going after wealthy foreigners. You may run into SOF/SOW challenges with banks in the future if your tax returns don't quite match your actual wealth.

Cyprus has the 60-day tax residence scheme which might be interesting for you. Spend 60 days per year there, don't be tax resident anywhere else, and you qualify for tax residence.

Thanks for your reply mate. Some good points here for me to explore - wasn't aware Malta had low taxes to be honest - will look into this further.

Yes, Cyprus is a great shout - I assume this in the non-dom regime you are referring to.

Food for though - cheers.

 

[Sols]

Yes, Cyprus is a great shout - I assume this in the non-dom regime you are referring to.

Non-domicile and tax residence are technically separate, but often considered connected. For the first 17 years of residence in Cyprus, you are non-domicile. This is separate (but can be used in addition to) the 60-day tax residence scheme.

 

[thomasparra]

Hi guys - what would you do in my situation in 2023. Goal is to pay less tax, legally - already live a travelling/international lifestyle and paying mega taxes in UK.

- Have run my own performance/affiliate company for 10 years in UK - limited company, single director set up
- Make £500k - £800k profit for past 3 years
- Have £1,000,000+ invested in markets through a UK LTD company
- UK tax resident
- Have UK and EU passport
- Currently spent around 6 months in UK, 3 months in Europe for Summer (balkans mainly) and 3 months-ish in US due to family being based there
- No house
- Take a huge salary - higher rate tax payer

I'm fully versed in UK tax residency rules so the simplest solution for me would seem to be UAE company and residency and would only mean some small lifestyle adjustments (90 days in Dubai, under 90 in UK and continue with my current slow-travel lifestyle). However, it seems this set up is trending from easy to more complicated with filling requirements and potential taxes on the horizon.

Is there some solutions closer to home - even in the Balkans where I already spend a chunk of time? Whilst there are some attractive tax regimes - Montenegro, Bosnia - the tax residency requirements have always put me off looking into it further (187+ days).

Be keen to hear any other ideas for people who are in a similar position to me - thanks!

Why would you spend less than 90 days in UK? Do you think it would trigger some tax event?
Dubai apparently you can become tax resident (as an individual) by staying 90 days as you said. I have also heard on this forum you can be considered tax resident even by staying only 1 or 2 days per year, if you become an employee of your UAE company. Please take this with a grain of salt as it's more speculation at this point - but can ask the right professional (there are a few here).

 

[leo8]

Why would you spend less than 90 days in UK? Do you think it would trigger some tax event?
Dubai apparently you can become tax resident (as an individual) by staying 90 days as you said. I have also heard on this forum you can be considered tax resident even by staying only 1 or 2 days per year, if you become an employee of your UAE company. Please take this with a grain of salt as it's more speculation at this point - but can ask the right professional (there are a few here).

Yes Dubai seems very up in the air at the minute and not confident in going for that solution. I also hate being in Dubai.

Under 90 days and with a few other small steps adhered to such as permanent place to live abroad and not working in UK mroe than 30 days means there are no ties and other complications when it comes to determining tax residency. Notes are here: RDR3: Statutory Residence Test (SRT) notes

 

[thomasparra]

Up in the air from what perspective?

If you can live only 90 days in Dubai per year that would not be acceptable?

 

[jkl197]

be careful with executing the "leaving the UK" plan, easy to make mistakes there.
You have to fill appropriate forms to tell HMRC that you are leaving, and make sure you stay out (as tax residency) at least 6 years to be on the safe side (if you get income from our companies in the form of salary+bonus), or at the very least 2 full tax years if you draw only dividends (speak with your tax advisor for the details).
Also remember to cut all ties with the UK (if you have kids they cant go to school in the UK, possibly sell all of your properties or at least make sure they are properly rented, etc. etc., do deep research on the "cutting ties" part.
And, read very carefully the page of the website gov.uk (and discuss it with your advisor) where it says you cannot stay in the UK for more than 15 days (or maybe 30 cant remember) for work reasons, this is a dangerous trap which could be considered a TIE not cut

 

[lavel]

How to file once you left the country ?

 

[Chonsai]

What about Sark?

https://www.offshorecorptalk.com/threads/moving-to-sark-best-tax-structure-for-uk-income.35081/

I just went on a 30 minute rabbit hole reading about @Barney2201's experience, looks like a great option for UK residents who want to save a lot of tax & live close to home!

If I was 'Sans kids, dog etc' I would just rent something simple for the summer then travel the rest of the year calling Sark home.

Sounds like you are sans kids, dog, and even house. Definitely worth a look

 

[Barney2201]

Well.... Have kids but one is in boarding school in the UK and the other lives with mum in Guernsey (separated, currently sorting out divorce) and yes, at the moment only rent properties but will by soon once markets cool even more....

It's possible to leave the UK and spend up to 90 nights in the UK plus some work days but still be considered not resident, it gets easier after 3 years as you drop one of the ties. But yes, you do need to cut all ties in terms of kids going to school (apart from boarding school), property you can live in, club memberships etc.

I now live between Sark and Monaco, long story and by all means if anyone is interested do let me know, but in short it's possible to live in Monaco for reasonable money if you rent an apartment overlooking the F1 track, what you can get for the apartment will often pay up to 75% of the rent, sometimes even more. Make the Sark living much easier as I have a European hub to bounce into when the weather is rubbish in Sark, and there's worth places to live....

 

[JimBeam]

in short it's possible to live in Monaco for reasonable money if you rent an apartment overlooking the F1 track, what you can get for the apartment will often pay up to 75% of the rent, sometimes even more

This is interesting...
So, if I got it correctly, you rent out the apartment but then sub-rent it for the race and that pays of the whole year's rent (or most of it) ?

How much is the rent (rough number in your example)?
How/where do you find people for F1 race?

 

[Barney2201]

Yes thats correct, the numbers vary massively, each apartment is allocated tickets based on the length of terrace, 2 tickets per 1m of terrace. I have a big apartment of 200sqm with a wrap around terrace on the first corner of the track, I get 68 tickets as the apartment has 34 meters of terrace, the rent is 144,000 Euro per year but.... I can sell 2 days of hospitality at 4k per ticket so effective take is 272,000 then you have to deduct your event and marketing costs, approx 100K so a small profit is possible IF you do everything yourself. The apartment I rent I used to use for F1 weekends for 6 years setting up my own F1 hospitality company in 2013 (please bear in mind I run a much larger events company in the UK so events is my thing). If you just want to give it to a hospitality provider (like me) for the weekend you could expect a rental around £100K, therefore your 10 million apartment in Monacio is costing you around 50k per year, plus you get opptunites to rent for E-GP, Historique and Monaco Yacht Show. It's an interesting solution, and there's plenty of people doing it...

 

[leo8]

Yes thats correct, the numbers vary massively, each apartment is allocated tickets based on the length of terrace, 2 tickets per 1m of terrace. I have a big apartment of 200sqm with a wrap around terrace on the first corner of the track, I get 68 tickets as the apartment has 34 meters of terrace, the rent is 144,000 Euro per year but.... I can sell 2 days of hospitality at 4k per ticket so effective take is 272,000 then you have to deduct your event and marketing costs, approx 100K so a small profit is possible IF you do everything yourself. The apartment I rent I used to use for F1 weekends for 6 years setting up my own F1 hospitality company in 2013 (please bear in mind I run a much larger events company in the UK so events is my thing). If you just want to give it to a hospitality provider (like me) for the weekend you could expect a rental around £100K, therefore your 10 million apartment in Monacio is costing you around 50k per year, plus you get opptunites to rent for E-GP, Historique and Monaco Yacht Show. It's an interesting solution, and there's plenty of people doing it...

Hi Barney, just revisiting this thread. I'd be keen to find out more about your Monaco setup - and subsequent hospitality management offering - and if it's something that has legs. Cheers!

 

[Barney2201]

More than happy to share my experience so far on the Monaco journey. PM if you would like an off line chat.

But in essence, yes it’s doable. Have the apartment on the first corner of the track and already have 2 x F1 teams interested in a buy out. I doubt it will turn a profit but the ability to live in a €10 million apartment in a tax free country for less than a similar apartment in London makes it workable.