Offshore companies

Planning for international private clients often involves the use of non-UK resident companies, whether owned directly by individuals or through an offshore trust/company structure.

Offshore companies are mainly used for UK tax planning when the owner is non-resident or UK resident but not domiciled in the UK. For guidance on the taxation of non-resident individuals and UK resident non-domiciliaries, see the Non-resident individuals—overview and the Non-domiciliaries and the remittance basis—overview.

As a general rule, directly owned offshore companies holding investments and other assets cannot be used to shelter income and gains from UK tax if the owner is UK resident and domiciled. This is the effect of two codes, the transfer of assets code (TAA Code) directed at income and section 3 of Taxation of Chargeable Gains Act 1992 (TCGA 1992) at capital gains. See: UK resident individuals—taxation of income derived from assets held within offshore companies and UK resident individuals—taxation of capital gains derived from assets held within offshore companies below. See also Clarke's Offshore Tax Planning—Trusts and Companies:

1. •

   Chapter 6 Non—resident companies [6.1], and

2. •

   Chapter 15.1 Underlying