International Tax Planning
Most individuals and businesses deal internationally. This can take the form of selling into another jurisdiction or offering services abroad. Even small businesses can have many overseas connections. At the Shareholder level, ownership of equity in overseas companies can often provide an advantage. Individuals may have possessions abroad such as a holiday home or boat. Once trips abroad increase, opportunities exist to mitigate taxation in a large number of tried and tested ways. More specialist bespoke planning is also available.
Business Planning
In many cases companies will either buy or sell goods and services in a number of different locations. Finance provided by a third party from another low or no tax location will provide an opportunity to charge for the provision of finance at market rates. Such rates may be higher than prevailing commercial rates available from banks, due to stringent terms and conditions applying to bank third party lending. Additionally, the provision of goods and the mark up made can be fairly apportioned between different jurisdictions. Whilst care is needed to ensure transfer pricing principles are not corrupted, considerable opportunity exists for profits to be generated in lower tax areas.
Ownership of intellectual property, branding and other valuable assets can be charged from lower tax areas into higher tax areas. Ownership of such income generating assets are usually ideally medium to long term investments for private pension schemes. A subsequent sale can often be capital gains tax-free.
Individuals
Many individuals own property abroad. Care must be taken to ensure they do not become dual resident. Careful consideration of ownership structures is required.
Those relocating on a semi-permanent or permanent basis need to carefully review their entire asset portfolio and future spending obligations, usually in a different currency, prior to adopting foreign residency. In many cases individuals are dual resident when initially being advised.
Long term time spent abroad often means consideration of inheritance tax and withholding tax to be necessary. Advance planning can reduce or totally mitigate these taxes. International tax planning usually co-ordinates a number of the other services and products we offer, such as Qualifying Recognised Overseas Pension Schemes (QROPS), examination of residency issues and the use of special purpose vehicles such as companies and trusts. It is very important to recognise the different and potential planning opportunities carefully structured pension products can offer, compared to personal trust vehicles.