Limiting tax on overseas earnings

TC writes: My wife and I are continually moving around the world as a result of her job. Is it possible for me to set up an offshore company so I could undertake small consultancy assignments wherever we happened to live to be financially efficient? I would expect my gross earnings to be between £10,000 and £30,000.

Answer

There is nothing to stop you forming an offshore company to use as the vehicle for your assignments. You will need to make sure that the costs are carefully controlled so that it makes sense financially. By having an offshore company that has been set up in a zero or low-tax environment you can limit the amount of tax you will pay on overseas earnings. An alternative is to operate as a sole trader, thus avoiding any costs involved with an offshore company. As far as British tax is concerned and assuming that you are non-resident for British tax purposes you will only be taxed in Britain on any income that you remit to this country. So be careful you do not do this unintentionally by for example, settling a British liability with money offshore. You will also need to check that for each tax jurisdiction in which you operate you are not deemed to be resident and therefore liable to tax on income there.