Craig Hughes – Partner and Head of International Private Client
Discover international tax planning
Offshore structures can play an important strategic role in the control and protection of family wealth in the modern world. Opportunities should not be overlooked.
For example, if you live in or have business interests in a region of political instability, we can help you protect your wealth from taxation, compulsory repatriation or forced heirship.
Equally, you might be relocating from one country to another, and wish to retain investment assets offshore, for sensible and acceptable tax planning purposes.
We offer a range of offshore advisory services to clients who are either UK tax-resident but not domiciled in the UK, or UK domiciled but not UK tax-resident. Our services are also helpful in the context of individuals coming to, leaving or returning to the UK.
We also specialise in assisting offshore Trustees; providing advice directly to the trustees, to beneficiaries and also performing tax reviews of structures.
Offshore advisory services
Our offshore tax specialists can advise on a broad range of tax issues. Below are some specific areas in which we are currently providing valuable advice to our clients:
Non-dom tax planning
The tax rules for non-doms changed dramatically from 6 April 2017, with certain UK tax reliefs removed from that date. We have helped many non-doms structure their affairs to take advantage of the reliefs that are still available, including:
- Use of offshore trusts to protect against future tax charges.
- Relocating from the UK to a more favourable tax jurisdiction.
In addition to the above, it is crucial that one examines his or her domicile position if relying on a non-dom status for some form of tax protection or planning. We work with our clients to assess their domicile and where appropriate we support this by preparing a statutory declaration of domicile which can help to support one’s non-domicile position should it be challenged or enquired into by HMRC (which can often happen many years later or even after death). It is felt that there will be increased scrutiny over the domicile position of individuals who have been in the UK for more a significant period (such as 10 years) but have not yet reached a deemed UK domiciled status (once one has been UK resident for 15 out of 20 tax years).
Coming to and leaving the UK
HMRC apply a strict statutory residence test (SRT) to determine when an individual starts and stops being a UK tax resident. Our in-depth understanding of the SRT rules enables us to advise on the optimal timings for arrival / departure from the UK to minimise their UK tax exposure. Examples include:
A UK resident client who was about to sell her UK property prior to emigrating to Dubai. Appropriate planning allowed the client to significantly alter her UK tax exposure.
A client who lived in Hong Kong, but spent significant time in the UK, was in danger of triggering UK tax resident status and increasing his UK tax exposure overnight. We were able to advise him on the maximum number of days he could spend in the UK and still remain non-tax resident, thereby avoiding the costly implications of accidentally triggering UK tax residency.
Requirement to Correct
We have helped many clients to declare their historic offshore tax liabilities to HMRC in advance of the “Requirement to Correct” (RTC) deadline.
A number of clients have approached us having received “nudging” letters from HMRC enquiring into their overseas bank accounts or offshore structures. In those cases we have been able to calculate the UK tax due, and disclose the position to HMRC in time. In other cases we have worked with the client to demonstrate to HMRC that his or her personal tax affairs are in order and up to date. We can also work with existing advisors to provide a tax review or second opinions. Examples include:
A client with an offshore investment portfolio, who had previously received incorrect advice that the income was not taxable if she kept the money offshore.
A client with a German holiday rental property, who was told (again, incorrectly) that because he had paid German tax on the rental income, he did not need to report or pay tax in the UK.
Although the requirement to correct deadline has passed we can continue to work with those who have offshore wealth to assess that their historic filing requirements have been adhered to correctly and where necessary work with them and HMRC to revise their position.
We also assist individuals who are tax-resident in other countries, but still have a UK tax exposure. Typically this will include those who own UK rental properties, but can also include those with UK directorships or who invest in the UK. We can assist with:
- Non-resident capital gains tax (NRCGT) returns, which have to be filed with HMRC within 60 days of the sale of a UK residential property.
- Non-resident landlord (NRL) applications and tax returns, for those who live outside the UK but rent out a UK property.
- Self-assessment tax returns for non-UK residents.
The offshore services team where appropriate will bring in team members from the other Menzies service lines to provide associated advice as and when it is needed. Please contact a member of the offshore advisory services team to arrange a no-obligation initial consultation or to speak to Menzies Partner Craig Hughes for more information about the offshore accounting and tax advice we offer.
Contact Menzies International private client team
To speak to a member of the offshore tax team or for more information about the private client services we offer to individuals, please contact one of the Menzies LLP offices or complete our contact form below.
When completing the contact form, please provide as much information as possible as this will help to ensure that your enquiry is directed to the most appropriate specialist. Having sufficient detail from the outset will also mean that your initial call will be more informed and of value to you.
Please note that rarely is it beneficial for a UK resident, UK domiciliary to relocate an otherwise UK centric business offshore for tax purposes, unless the business owner is prepared to leave the UK to live in a different country for at least 5 years. For those business owners who are not prepared to leave the UK, planning of this nature will be caught by far reaching anti-avoidance legislation which negates the planning and may leave one in a worse position overall. All information provided is strictly private and confidential.