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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4996
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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If I setup an offshore LLP where I am the sole member do I

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If I setup an offshore LLP where I am the sole member do I have to declare the income derived from it in the same way as I declare it for a UK based LLP?
For a UK based LLP tax is charged at 38.5 and 45% on dividend based incomes from the LLP. If my offshore LLP makes a profit of £100k do I have to declare the entire £100k as my UK income or do I only have to declare the dividends I pay myself and keep the rest of the profit in the LLP?
I am a UK domiciled resident and passport holder.
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question.As a UK resident for tax purposes, you are taxed on your worldwide income and gains arising in the tax year. For tax purposes, profits of your offshore LLP are taxed in the hands of the members. In other words, the members are treated as earning the profits, irrespective of whether the profits are actually paid out to them.In your example the entire £100k would be chargeable to UK income tax. More information on this can be found here (look under UK Tax Treatment of Overseas Entities)http://www.wealthprotectionreport.co.uk/public/Chapter-11-Tax-Benefits-of-Offshore-Companies.cfm I hope this is helpful and answers your question.If you have any other questions, please ask mebefore you rate my service – I’ll be happy to respond.
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Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer. Best wishes.