United Kingdom Overview

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).

United Kingdom Private Companies

The United Kingdom is home to the world’s second largest financial centre and the largest in Europe with over 2.5m registered companies. Of these companies a very significant portion are controlled from overseas. UK corporations are liable to pay UK corporation tax by virtue of their incorporation (regardless of the location of their management or the source of their income). This does not prevent them also being liable for tax elsewhere. To avoid tax liabilities arising in two countries simultaneously the directors are often located in offshore centres.

United Kingdom Limited Liability Partnerships (LLPs)

United Kingdom LLPs are widely used for international tax planning. The LLP is transparent for tax purposes which means that it will never be liable to pay UK corporation tax. Instead income arises on the partners directly. For example a UK LLP formed by two members who are companies in a zero tax country (such as the Isle of Man, St Kitts and Nevis, the BVI etc) will provide a UK incorporated entity which does not pay any tax anywhere.

United Kingdom Nominee Services

Nominee services (also known as mandatory services and sometimes as “bare trusts”) is where a person is appointed as director or shareholder having no discretion over their actions; they can only act in accordance with instructions from the beneficial owner. The situation in which people most commonly encounter nominee shareholding is where a bank or stockbroker buys or holds stock/shares for a client. In this case by default the shares will be held in the name of the broker or bank as nominee for their client.

United Kingdom Corporate Accountancy

Accountancy services in the United Kingdom exist to support one of the world's largest financial centres. Accountancy and related services are well-regulated, generally highly efficient but are also very costly in international terms. 

United Kingdom Personal Accountancy

Tax Returns    
UK accountants are best placed to prepare and file local tax returns for individuals who are or wish to become resident in the UK. For a discussion of the benefits of UK residency please see our main article.

Tax Advice
UK accountants are competent to give advice on local taxation issues but may also be part of a network of advisors who can give consideration to multinational tax matters. This area is addressed in more detail in our main article on advice in the UK.

United Kingdom Public Companies

United Kingdom public companies are not a very popular international product since they have to pay UK corporation tax and additionally cannot be formed in such a simple and cost efficient manner. They require capitalization, see below, which means that forming a UK Plc is a significant undertaking. UK public companies have the various pros and cons associated with UK private companies outlined in our main article on UK private companies.