United Kingdom

The United Kingdom is home to the second largest financial centre in the world. Its financial markets are amongst the largest and most active in the world and it has a seat at the top table of international affairs. The UK enjoys an excellent reputation, world-class regulatory infrastructure and very low corruption. It leads the way in the international fight against tax evasion despite having historically established the majority of offshore financial centres. The UK’s international reputation, size and unique background mean that many services are available in the UK which would not be permissible in other countries such as the online and instant formation of companies requiring little or no paperwork, diligence documents or background checks and the widespread use of nominee directors (or puppet directors). For UK domicile residents the possibilities of legally avoiding tax are few and far between, require more sophisticated planning than was previously the case and will generally involve other the use of countries. The UK’s anti-avoidance rules are amongst the most sophisticated in the world and its tax system is accordingly one of the least straightforward. The use of offshore countries for tax planning (such as the Channel Islands and the Isle of Man) is coming under renewed pressure from UK authorities as well as heavy media criticism and many commentators feel that the time for this type of planning has come to an end. By comparison the  use of other EU member states’ financial centres (such as Malta and Luxembourg) is unlikely to be subjected to the same attacks given the altogether different nature of international relations between EU members. The UK has historically been a popular choice for non-domicile residents (for the difference between domicile and residence please see our main article on residents in the product section of the website). The main products of interest within the UK are based around having a ‘shop front’ presence in a high-tax reputable country whilst still taking advantage of low or no tax countries. Examples include the use of companies as nominee for zero tax companies and UK LLPs which are transparent for tax purposes (so will not pay tax in the UK unless they have a UK partner). The main products of interest to UK residents and domiciles are EU entities based around the creation of genuine substance and a robust local presence (for more information on this please see our main article on business incubation in the products section).