Business Structuring

Having the right structure can improve significantly the likelihood of your business succeeding. Your ideal business structure will depend on what type of activity you will be undertaking and your aims and objectives. As each business is unique and only by fully understanding your aims and objectives can we give you the best advice.

Investment businesses

If you are intending to carry out investment activities in the UK, you should consider suitable non-UK structures to own UK assets. Planning this structure carefully can mitigate your exposure to UK taxation on capital growth.

Income generated on investments may be subject to withholding taxes when paid to a person resident outside of the UK. We can help you minimise your exposure to UK taxes whilst maintaining full compliance with the law.

For example, there are particular rules for real property when rental income is generated. Non-UK resident owners of real property must consider if they need to operate the special ‘non-resident landlord scheme’. Not only can Kingston Smith advise on this, but also we are able to apply to HM Revenue & Customs to have rentals paid gross of withholding taxes.

Trading businesses

When it is your intention to trade, the first decision you must take is whether you wish to trade with the UK or within the UK. The key considerations are:

Market requirements, i.e. is your presence in the UK vital for you to sell products or services?
Legal form and protection, i.e. what is the risk to the global business if the UK business fails? What UK registrations are required for you to trade?
Taxation, i.e. what is the most tax efficient way to trade and balance different jurisdictions taxation requirements?

When you trade with the UK, then our efforts are focused on not creating a UK taxable presence.

When you are trading within the UK, then the traditional choice has been between a branch (known as a UK establishment from the 1st October 2009) or subsidiary. A well-trodden path is to create a branch to allow the global business to benefit from any losses generated in the UK in the first few years of establishment. At a future date, this branch is incorporated into a subsidiary.

At Kingston Smith we like to tailor our advice; for example, by structuring contracts carefully a UK branch may service contracts between UK customers and the company. This reduces the risk taken in the UK, which may decrease the amount of taxable profit that should be allocated to the UK branch. This type of planning should only be undertaken with professional advice, our advice.

There are various levels of financial information disclosure that should be considered, for example a branch must register at Companies House and the accounts of the company will need to be filed, thereby making them available to the public.

The UK has an indirect tax system known as Value Added Tax (VAT). To have a successful business in the UK requires proper understanding of any VAT obligations.

Finally do not forget Importation Duties, Excise Duties and any licence requirements.

If you are intending to do business involving the UK please contact, Paul Spindler, Partner, Kingston Smith LLP