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bigduckontax, Accountant
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There, my friend wants to open an off shore bank account

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Hello there, my friend wants to open an off shore bank account in order to invest into airport car park spaces situated on the British mainland. What are her tax obligations towards British tax office in case the off shore account is opened in one of British jurisdictions? And also,what are her tax obligations towards British tax office if the off shore account is not opened in a British jurisdiction (by British jurisdiction I mean Isle of Man or Guernsey,for instance,non-British jurisdiction would be Cyprus or Panama,for instance)?
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. The way the big boys operate is to run business in the UK through a limited company and then bill from off shore companies in say Gibraltar, Channel Islands, Turks and Caicos Islands, Panama etc ie tax havens to reduce the level of UK taxation. You will have noticed the persistent media exposure of such schemes which, at present, are a perfectly legal method of tax avoidance. Whether this will be legislated against in the longer term is a moot point. However, running these offshore companies does not come cheap as it is big business in tax havens. There will probably have to be local directors, offices etc to support. As an UK company is divorced from its shareholders being a separate legal entity this can, at the moment, be done with impunity. If shareholders and directors do not draw moneys down from the company they attract no tax. As far as disclosure of activities are concerned she is only required to make tax returns in the UK if she is in receipt of income which has not bee taxed at source. If she spends more than 183 days in the UK in any one tax year then she is liable for UK taxation on her world wide income, but if those off shore companies make no distributions to her there is nothing to declare. I do hope that I have shed some light on the situation for you.
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