Tax advice for my current situation, UK - UAE to withdraw crypto and open broker account to invest.

[UAETrader454]

Hello, I am a UK citizen who is self-employed, I report to HMRC with a self assessment each year, this year I will be telling HMRC I am no longer a tax resident.
I have been holding Crypto currency anonymously for quite some time now, and I am wanting to cash it out without paying Tax, I am also a stock trader, so I wish to trade tax-free long term.

To do this, I have formed a company in a UAE free zone and I now have UAE residency, I have also opened 2 personal bank accounts and I have a proof of address and UAE phone number, I have also opened a new Interactive broker account in the UAE with my Emirates ID and proof of address and this accounts tax status is UAE.

My plan was to withdraw my cryptocurrency in $ into my personal UAE multi currency bank account and then transfer it into my Interactive Brokers account, so I can invest it and trade with it tax-free along with my other funds.

I planned to stay out of the UK for the required time needed to be classed as a non tax resident, and only spend 90 days per year in the UK, the remaining time would be spent travelling and also be in Spain mostly as a tourist, but I could get residency there too if needed for a longer stay. (I am unsure if this will complicate my UAE tax status)

My main issue is, I did not realize the UK are able to tax you for any capital gains if you return to the UK within 5 years of disposing of the assets, and as I did originally wish to return at some point after 1 year this is a big issue for me and there's also the issue of CRS reporting, I checked my UAE bank account declaration, and it states I am not a tax resident anywhere else apart from the UAE, So I am unsure if ill be reported or not?

Will Interactive brokers report a CRS to the UK about my new funds?

Have I gone about this the wrong way? Should I have done it this way instead... open a UAE business account & deposited my crypto funds into the business account, then either open an interactive business account in the company name and deposit it into IB this way, then when withdrawing money to live on, pay myself via the company tax-free?
Or pay myself a very high salary from the company into my personal account and then transfer this into my IB broker account?

The UK do not tax on salary when returning, only capital gains.

Can anyone offer any advice or a better method that will leave me legally all OK?

I have not withdrawn my Crypto yet, so I could go back to Dubai and open a business account if needed, although I'd prefer not to as I am quite far away at the moment in another part of the world.

Thank you guys

 

[CaptK]

Hello, I am a UK citizen who is self-employed, I report to HMRC with a self assessment each year, this year I will be telling HMRC I am no longer a tax resident.
I have been holding Crypto currency anonymously for quite some time now, and I am wanting to cash it out without paying Tax, I am also a stock trader, so I wish to trade tax-free long term.

To do this, I have formed a company in a UAE free zone and I now have UAE residency, I have also opened 2 personal bank accounts and I have a proof of address and UAE phone number, I have also opened a new Interactive broker account in the UAE with my Emirates ID and proof of address and this accounts tax status is UAE.

My plan was to withdraw my cryptocurrency in $ into my personal UAE multi currency bank account and then transfer it into my Interactive Brokers account, so I can invest it and trade with it tax-free along with my other funds.

I planned to stay out of the UK for the required time needed to be classed as a non tax resident, and only spend 90 days per year in the UK, the remaining time would be spent travelling and also be in Spain mostly as a tourist, but I could get residency there too if needed for a longer stay. (I am unsure if this will complicate my UAE tax status)

My main issue is, I did not realize the UK are able to tax you for any capital gains if you return to the UK within 5 years of disposing of the assets, and as I did originally wish to return at some point after 1 year this is a big issue for me and there's also the issue of CRS reporting, I checked my UAE bank account declaration, and it states I am not a tax resident anywhere else apart from the UAE, So I am unsure if ill be reported or not?

Will Interactive brokers report a CRS to the UK about my new funds?

Have I gone about this the wrong way? Should I have done it this way instead... open a UAE business account & deposited my crypto funds into the business account, then either open an interactive business account in the company name and deposit it into IB this way, then when withdrawing money to live on, pay myself via the company tax-free?
Or pay myself a very high salary from the company into my personal account and then transfer this into my IB broker account?

The UK do not tax on salary when returning, only capital gains.

Can anyone offer any advice or a better method that will leave me legally all OK?

I have not withdrawn my Crypto yet, so I could go back to Dubai and open a business account if needed, although I'd prefer not to as I am quite far away at the moment in another part of the world.

Thank you guys

If you currently are out then this will work.

 

[UAETrader454]

If you currently are out then this will work.

Sorry, what do you mean by this please?
I wish to return after 1 year so ill still be liable for capital gains tax?

 

[234628725]

Sorry, what do you mean by this please?
I wish to return after 1 year so ill still be liable for capital gains tax?

I'm not an expert but I understand that you will be liable for capital gains tax if you return as tax resident within (I think) 2 years.

You need to leave for good. You can go to Ireland/Gibraltar/Isle of Man rather than to UK. Get familiar with the Statutory Residence Test. There is a good chance that you think that you are no longer resident but you still are resident due to having multiple ties like family, property, work...

 

[CaptK]

Sorry, what do you mean by this please?
I wish to return after 1 year so ill still be liable for capital gains tax?

You can visit the UK on holiday but you can not undertake any work. I assume that's what you mean by returning to the UK.
You need to cancel all subscriptions you have like gym, mobile phone and if you have a property rent it out or let friends or family live there. Don't leave your clothes or personal effects there as that can be deemed as residency.
You will be liable for tax on the rent regardless of where you are.

 

[UAETrader454]

You can visit the UK on holiday but you can not undertake any work. I assume that's what you mean by returning to the UK.
You need to cancel all subscriptions you have like gym, mobile phone and if you have a property rent it out or let friends or family live there. Don't leave your clothes or personal effects there as that can be deemed as residency.
You will be liable for tax on the rent regardless of where you are.

Yes I would be staying at my friends house when i'm in the UK and I would not work , I will be taking my car with me to Spain, I was going to register it to my parents house, is this wise or should i declare it as exported?

In regards to capital gains tax. if I did want to move back to the UK within 2 years, would I be better withdrawing my crypto via my company in Dubai in to a business account rather than my personal bank account?
My thought is the company is not liable to CGT in the UK but I as a person am if i return within 5 years.

 

[UAETrader454]

I'm not an expert but I understand that you will be liable for capital gains tax if you return as tax resident within (I think) 2 years.

You need to leave for good. You can go to Ireland/Gibraltar/Isle of Man rather than to UK. Get familiar with the Statutory Residence Test. There is a good chance that you think that you are no longer resident but you still are resident due to having multiple ties like family, property, work...

Thank you, I have done the test and I have 2 ties so I think i am classed as non resident as long as i do not stay longer than 90 days in the UK

 

[alambic]

If you sell your crypto then return to the UK in less than 5 years (if you spent 4 more years out of the last 7 in the UK), then you'd liable for capital gain upon your return.
How would you withdraw the crypto to a personal bank account in the UAE? As soon as they hear about crypto, they'll want to close the account.
If you send funds to a UAE company and sell it there then pay yourself a salary, you'd still be liable for capital gain tax upon your return because that counts as a disposal.

 

[234628725]

You can visit the UK on holiday but you can not undertake any work. I assume that's what you mean by returning to the UK.
You need to cancel all subscriptions you have like gym, mobile phone and if you have a property rent it out or let friends or family live there. Don't leave your clothes or personal effects there as that can be deemed as residency.
You will be liable for tax on the rent regardless of where you are.

Hi CaptK. Thanks for your input. Are you sure that what you are saying applies to UK? As far as I know this does not apply to UK but might apply in another country. As far as I know the "statutory residence test" decides whether you are resident or not. As far as I know you can have clothes, personal effects, you can undertake some work and still be non-resident. Undertaking work is one of the "ties" to uk but it doesn't automatically make you a resident. Work done in UK is taxed in UK even if you are deemed non-resident.

Please correct me if I am wrong, preferably with some reference to look up. Thanks.

 

[UAETrader454]

If you sell your crypto then return to the UK in less than 5 years (if you spent 4 more years out of the last 7 in the UK), then you'd liable for capital gain upon your return.
How would you withdraw the crypto to a personal bank account in the UAE? As soon as they hear about crypto, they'll want to close the account.
If you send funds to a UAE company and sell it there then pay yourself a salary, you'd still be liable for capital gain tax upon your return because that counts as a disposal.

There are no issues withdrawing Crypto to a UAE account, it is completely fine to do there from what I have experienced and have been told by others who live there and work with crypto.

Are there any legal ways around being liable for CGT?

 

[234628725]

There are no issues withdrawing Crypto to a UAE account, it is completely fine to do there from what I have experienced and have been told by others who live there and work with crypto.

Are there any legal ways around being liable for CGT?

Being resident only in a 0 GCT country

Alternatively you can look up SEIS, EIS and venture capital schemes. Investing 100k in SEIS allows you to reduce CGT liability by 50k and income tax liability by 50k.