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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4947
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I am just about to re-structure my UK business after starting

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I am just about to re-structure my UK business after starting up an offshore company. I need to check that the structures we want to put in place are legal etc.

Hello, I'm Keith and happy to help you with your question.

Please tell me exactly what you are intending to do in your restructuring.
Customer: replied 4 years ago.

I have a Ltd company, let's call it ABCD Ltd.


It trades as ABC. (correct - ABC).


Can the company sell the trading name ABC, and the goodwill associated with it, to an offshore company ... so that the offshore company receives the income, and pays ABCD Ltd a management charge to do the work?

No problem at all, yes.

Customer: replied 4 years ago.

You can see what we're trying to do ... avoid VAT by having the offshore company take all the income.


The offshore company pays £78,500 a year to ABCD in management fees. This is ABCD's only income - just below the VAT threshhold.


Then ABCD uses its come to pay all the bills, wages etc.


Is that legal / ethical?



You must be careful not to exceed the limit. It's perfectly legal and there are no ethics in taxation. remember ladies of the night keep extensive records in case of investigation by HMRC!
Customer: replied 4 years ago.

OK, many thanks one other aspects, if you don't mind:


The offshore company is, say, JJJJ Ltd, registered in Gibraltar. Should it now become: JJJJ Ltd, Trading as ABCD?


And client contracts etc. Are they issued by JJJJ Ltd?

Why bother? It seems an awful palava for no good reason.
Customer: replied 4 years ago.

But who does that client have the contract with - the offshore company they pay, or the UK management company who delivers the service etc. Who do they sue / ask for their money back if there's a problem?


The company who delivers the service, the UK management one. What they do with their funds are of no concern to the client.
Customer: replied 4 years ago.

Oh. That's a revelation, many thanks!


So we can carry on as we are - same website,, and use the same online contract, which is with ABCD Ltd. But the client doesn't need to know that JJJJ get the money?

It is of no concern whatsoever to the client.
Customer: replied 4 years ago.

wow. That's really helpful Keith. Presumably, the management agreement needs to be worded so that ABCD Ltd has legal liability towards the clients, or something? Is there a sample management agreement you can point us to?

Presumably you mean the agreement between the UK and the Gibraltar companies? If so it would be a good ides.

Unfortunately Just Answer policies preclude me form recommending third party offerings. You will have to search the net yourself.
Customer: replied 4 years ago.

OK that's fine. MANY thanks. So helpful. I may be back to you later when things get going.

Pleased to be of assistance.
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Thank you for your excellent support.