Offshore and UK company formations, banking, mortgages, secured credit cards    

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British Ex-pats

On this page:

• International Bank Account At Lloyds TSB International

• Working offshore

• Mortgages on UK Property for British Expats

• British Expats and UK rental property - Capital Gains Tax and Inheritance Tax

• Not Resident and not ordinarily resident status

• Becoming Resident again - UK tax position

• Employment Company - Professional Services

• UK and International Tax Advice

• Benefits of an offshore company or bank account

• Pensions for Expats

International Bank Account at Lloyds TSB International

The Lloyds TSB Premier International Account is an offshore current account aimed for those working, living, travelling and banking abroad. All existing users of Lloyds TSB International are eligible to apply for this account. For new users you will need a gross annual income of £50,000 or currency equivalent, or over £25,000 or currency equivalent to invest with Lloyds TSB International within 3 months of opening your account.  Click on link below to apply online.

• Lloyds Premier International Account allows you to manage and access your money internationally with offshore current accounts in 3 currencies; Sterling, Euro and US Dollars.
• You can access your money 24/7 anywhere in the world with Internet Banking and PhoneBank. Users can send and receive money worldwide with confidence as Lloyds TSB International offer easy and secure international transfers.
• There is no charge for the account provided you maintain a realistic balance of £/€2,500 or $3,500 – if the balance falls below these minimums a £/€20 or $30 monthly charge is applicable for the month in which the balance limit was breached.

Working offshore

Working offshore as offshore contractors, offshore consultants, etc., gives British Expats an opportunity to earn tax free incomes and to manage their wealth tax-efficiently, often through offshore employment companies.   We offer several services to British ExPats including establishing offshore bank accounts and credit cards and the formation of offshore companies and trusts in tax free jurisdictions (for example Seychelles, The British Virgin Islands) for efficient protection of assets or for your own employment.   We also assist with mortgages for property purchase in the UK.    Our page "Why go Offshore" details uses of offshore companies and trusts, including, and of particular relevance to British Expatriates working overseas, the offshore employment company.  We include details of this below.

Mortgages on UK property for British Expats

For non residents we are pleased to be able to introduce you to lenders who can arrange mortgages [residential and buy-to-let] on UK property.  For a Sterling or currency mortgages, Buy to Let or for private residence, the maximum 'loan to value' is 65% with a minimum loan of £100k.  Rates are comparable with onshore UK lenders.   Contact us if you are interested.

British Expats and UK rental property - Capital Gains Tax and Inheritance Tax

Capital Gains Tax:  The good news is that capital gains tax (CGT) works in a very different way to income tax, which if you are UK domiciled* follows you wherever you go! CGT in contrast focuses more on the residence of a person, rather than their domicile and as such, it is possible to dispose of assets during a period of absence from the UK without being subject to UK CGT.  You would need to be non-UK resident for at least 5 complete tax years, otherwise the gain will become chargeable on your return to the UK. 

So what about using an offshore company to hold the UK rental property? Well this makes life even easier as there is then no requirement for you personally to be non-UK resident. A disposal of the property is simply free of UK CGT when held in an offshore company. In addition, any rental income arising on the UK property would be subject to income tax at 20%, not the increasing rates of income tax up to the current additional rate of 50% that individuals are faced with. As a final bonus, where a rental property is held within a non-UK resident company, the non-resident landlord provisions (the deduction of basic rate tax at source) will not apply, so the proceeds will be received into the company gross.  

Inheritance Tax: The position for inheritance tax (IHT) unfortunately adds to the tax confusion and is different again, as this, like income tax, is based on your domicile*. As a UK domiciled person you would be subject to IHT on any property situated in the UK, despite the fact that you might not be UK resident at the time of the lifetime transfer of the property, or your death. Sadly the only way to exclude this property from IHT is to become non-UK domiciled, which is a story for another time! 

So can we also save IHT by holding UK property in an offshore company? The short answer is maybe! IHT is still charged on company shares, with the only possible relief being business property relief, which only applies where the company is trading. Unless the rental constitutes a ‘furnished holiday let’, it will not be trading, and HMRC have made life even harder to meet the conditions for this from April 2012 by increasing the requirements for the property to be both available for let and actually let. If however you are able to meet the strict conditions, 100% business property relief would be available on the company shares, reducing your IHT liability on the offshore company and the UK property it holds to nil. 

The UK Tax system is complex and in all circumstances, good professional advice should be sought.  We can put you in touch with Chartered Tax Advisers who specialise in this matter and who have kindly provided the information above.

Not resident and Not Ordinarily Resident status 

This would describe the status of those who leave the UK to work overseas for at least one complete UK tax year. The rules are fairly complex, but generally return visits to the UK should not exceed an average of 91 days per year over a four year period (or 183 days in any one tax year).

The Inland Revenue has a very good website with a section for non-residents.  This link http://www.hmrc.gov.uk/cnr/faqs_general.htm will take you to their "Frequently Asked Questions" page for a fuller description of "Non Residency".

Becoming resident again - UK Tax position

If you are a UK citizen working overseas and are not resident in the UK for tax purposes, but propose to return to the UK and become tax resident again, we also strongly recommend you take professional advice on planning for this before re-entering the UK so that your offshore earnings are not compromised.  Let us know if you would like an introduction to a suitable Chartered Tax Adviser.

UK and International Tax Advice

*Domicle: http://www.hmrc.gov.uk/cnr/hmrc6.pdf "Domicile is a concept of general law. It is used to determine the system of personal law (dealing with matters such as marriage, divorce and wills) that should be applied to an individual who has connections with more than one jurisdiction. Domicile is distinct from nationality or residence. You can only have one operative domicile at any given time. 4.2 What does domicile mean? Domicile is a matter of general law; not of tax law. There are many things which affect your domicile. Some of the main points that you should consider if you are claiming not to be domiciled in the UK are shown below: • You cannot be without a domicile. • You can only have one domicile at a time. • You are normally domiciled in the country where you have your permanent home. • Your existing domicile will continue until you acquire a new one. • Domicile is distinct from nationality and residence, although both can have an impact on your domicile. • The fact that you register and vote as an overseas elector is not normally taken into account when deciding whether or not you are domiciled in the UK. Any references we make to being ‘domiciled in the UK’ are references to being domiciled in any part of the UK.                      4.3 What types of domicile are there? There are three types of domicile. These are: • domicile of origin • domicile of choice • domicile of dependence." You should contact your own Tax Office if you have any queries on your domicile position.

We work closely with a firm of International Chartered Tax Advisers in the UK who will provide high quality UK and international tax advice for UK residents and Expats. Even a few hundred pounds for sound professional advice pales into insignificance compared to the potential cost of getting it wrong!    Contact us if you would like an introduction.

Employment Company  -  Professional Services 

British Expatriates working overseas such as engineers, IT consultants, designers, authors, musicians or entertainers, teachers, etc., may wish to establish an offshore 'international business company' [IBC] for their own employment, to which they may assign the right, or contract with the IBC the right, to receive their fees.   If incorporated in a tax-free jurisdiction the IBC may not be required to pay tax on its profits which can be reinvested in a tax-free climate to generate further income in the IBC.  Payments to the individuals concerned will of course be subject to tax according to the laws of their country of residence but payments can be structured in such a way as to minimise their tax liabilities.

For instance it may be possible to increase subsistence expenses as against fees that would be paid to the individual.   Profits made by the company will be subject to low or no tax (according to jurisdiction of incorporation) and there are particular benefits where profits are allowed to roll up, so that there are tax advantages not only on the original profits, but also on any investment income generated on those profits.   The profits are therefore cumulative and can be substantial. 

It is also common for contractors and consultants working overseas to need a structure of this kind because the companies using their services sometimes do not want to "employ" or contract with an individual and only want to contract with another company for the individual's services.  By establishing an offshore company you may have a consultancy agreement with your own company, but the company itself contracts for your services with third parties. 

Contact us for further information.

Benefits of an offshore company or bank account

If you meet the criteria of non-residency (see next section), by establishing an offshore bank account and/or company, you may enjoy earnings on all of your overseas income free of UK tax. There are tax planning opportunities if you are married (husband and wife are treated individually)  reduced tax liability on rental income from your UK property UK tax free returns on savings and investments which are transferred or held offshore. Jayga Ltd itself does not give tax, financial or legal advice, but where such advice is required we will be pleased to refer clients to professional advisers in these fields.  Send us your question using our contact form.

If you would like to discuss any particular situation with us, we assure you that you will receive the personal and completely confidential attention of one of our directors.  Just use our contact us form to send an enquiry.

Ex-Pat Pensions

We have a relationship with a Trust in Guernsey that provides pensions for Expats.  Please read our page Pensions for Expats and if you are interested we will be happy to introduce you.

Disclaimer:  No reliance should be placed on the information posted on this website.  The information is provided only as a guide and a convenience to our visitors and nothing contained herein should be construed as specific advice nor do we accept any responsibility for advertisers on this site.  Jayga Ltd makes no warranties or representations regarding the fitness for purpose of the content provided.  We recommend that all clients seek the best local advice on legal or tax issues.  If you do not have your own professional advisors we will assist you in finding one.

Links to other websites on the page does not imply recommendation and Jayga Ltd accepts no responsibility for the content or performance of the advertisers.

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