Offshore Companies - A guide to income tax anti avoidance rules by Offshore Formations 247

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Offshore formations 247 have introduced a new guide for offshore companies on income tax anti avoidance rules. The guide explains how offshore companies will be affected by tax anti avoidance rules which can apply to both income tax and capital gains purpose. The guide provides a detailed account of the benefits that could be taxed under the tax avoidance rules. It also provides some valuable methods to avoid being caught by such provisions.

Offshore companies need to be aware of how their offshore company will be affected by tax anti avoidance rules which can apply to both income tax and capital gains purpose.

Many businesses and individuals setting up offshore companies need to be aware of how their offshore company will be affected by tax anti avoidance rules which can apply to both income tax and capital gains purpose. Offshore formations 247 are an experienced company formation agent specialising in the incorporation of new businesses both within the UK and overseas. They have added another useful guide to their online article resource base that explores the income tax rules for an offshore company.

The article explains that there must be a transfer of assets by an individual in the initial incorporation process. As a result of the transfer of assets, income becomes payable to a non-resident company or trust. The transferor must have the power to enjoy the income in some way or receive/be entitled to receive a capital sum. The transferor must be ordinarily resident in the UK in the year of liability.

If all the above conditions are fulfilled then the income that is payable to the offshore company then become payable to the individual who made the transfer permitting them to have the power to enjoy the income.

The process of setting up offshore companies can be a daunting process. Researching the benefits that offshore companies can offer, the process involved in setting up a company overseas and legislation applicable to each individual jurisdiction are key elements that should be studied first.

Tax benefits are usually a major consideration for businesses and individuals wishing to set up an offshore company. The guide explains that once an offshore company is formed, this will usually constitute a transfer of assets by the individual. The UK authorities will consider certain classifications for what a transfer of assets will involve. This will include where an individual transfers cash to a non-resident trust, or subscribes for the share capital of an offshore company. A transfer of assets will also be classed where an individual transfers assets such as shares or property to a new or existing non-resident trust or other person or company abroad.

The above provisions apply to an individual that forms an offshore company and retains the right to benefit from the company’s income or capital. The guide provides a detailed account of the benefits that could be taxed under the tax avoidance rules. It also provides some valuable methods to avoid being caught by such provisions. One way to prevent being caught by the above provisions will include ensuring that the individual and their spouse are excluded from benefiting from the offshore company.

The article also explores the various “let outs” from the income tax avoidance rules. The article resource base provides excellent advice and information on various considerations involved in the setting up of an offshore company. Another guide featured called Offshore Company – Tax planning continues to explore the methods to use the company to avoid income tax anti avoidance rules.

Offshore Formations 247 are part of the Company Formations247 Group with a team of experienced company formation agents having incorporated in excess of 100,000 companies. They provide advice and assistance for those interested in 'going offshore'. Following the successful incorporation an offshore company, they also offer a full range of specialist services to assist in the ongoing management of offshore companies.

The guide can be accessed here. Income tax anti avoidance rules for offshore companies

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Marc Labelda
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