Moving to Antigua - UK Director PAYE

[Barney2201]

I am know i'm going to get lots of people say (go speak to an accountant), however... I want to throw this out there before seeking professional advice...

We have spent the last two years living in Guernsey, now looking to move to Antigua which has no personal or corp tax. We currently have companies in both the UK and Guernsey (which being offshore makes our accounting bill pretty eye-watering..).

We mainly trade in the UK but will have a small subsidiary office in Antigua.

Is there any reason why we cannot pay my wife who will be a non-resident company director of UK company a large salary and bonus tax free and significantly reduce our UK corp tax liability?

I believe non-resident directors are not subject to UK tax, we have been outside the UK for over 12 months so no NI to worry about. She will not come to the UK for work, I will be the only one coming in to work and will pay tax based on the amount of UK work days.

 

[Chris Ashdown]

You may be able to make the offshore company the head office and charge all subsidiaries a massive management fee as well as licence fees to use the rights of the logo's etc. but your expensive accountants are by far the best people to advise you rather than a forum member

 

[Barney2201]

Absolutely, just wanted to see if anyone threw up any red-flags straight away before engaging with the 'expensive accountants'...

Paying a high salary and bonus seems a much cleaner and simpler way to reduce the UK corp tax liability. It's also means a single UK entity which is much cheaper to manage. We have investigated using things like IP to extract profit but unless your a large corporate the setup and management costs make it unrealistic.

 

[UK Contractor Accountant]

Paying a high salary and bonus seems a much cleaner and simpler way to reduce the UK corp tax liability.

If non resident and all duties for UK Co are carried out overseas then PAYE will not apply to the earnings.

The other side of the coin is ensuring that the UK CO gets a full ctax deduction for the 'high' bonus and salary.

BIM47105 - Specific deductions: staffing costs: payments to dependants and close relatives
Where there is a non-trade purpose to the remuneration or the quantum is determined by the relationship, then the remuneration is not paid wholly and exclusively for the purposes of the trade and it is not an allowable deduction.

Where there is a non-trade purpose to the remuneration or the quantum is determined by the relationship, then the remuneration is not paid wholly and exclusively for the purposes of the trade and it is not an allowable deduction.

Where the facts show that a definite part or proportion of the remuneration is not wholly and exclusively laid out or expended for the purposes of the trade, profession, or vocation, you should only disallow that part or proportion.

 

[UK Contractor Accountant]

Antigua which has no personal or corp tax.

not strictly correct. Antigua does have a Corporation Tax regime

 

[Barney2201]

Thanks for the info UKCA, really helpful.

Antigua does have local corp tax but only taxes profits on locally sourced income. We are opening a branch office there and will pay local tax on anything which happens in Antigua, however most of our work will come from the marine industry so will be more general Caribbean and off island.

Looks like the best bet is for my wife to solely own the company, that way the profit can be paid as a bonus and not be subject to UK corp tax and would negate the issue of overpayment for her role as 'just' the accountant. I would be demoted to skivvy with a very low pay so I don't get hammered with PAYE when working in the UK. The power will definitely go to her head... God help me!

 

[Chris Ashdown]

"wife to solely own the company" What happens after the split up and divorce

 

[UK Contractor Accountant]

What happens after the split up and divorce

do what the wife's normally do - claim half her assets