The use of ‘agency companies’ as a structure for international tax planning is a relatively simple concept. This structure involves the establishment of an offshore company which would act as principal. This offshore company would then appoint an English company to become its agent. As the agent the English company would act for it in respect of the collecting in fees, commissions or other moneys that are due to the principal.
During the first week of December three large stock market listed companies announced plans to quit Britain and move there corporate headquarters either to Ireland or Luxembourg . These were, Henderson, an asset manager, Charter, an engineering company and Regus, the serviced offices provider . Another, Brit Insurance, in also understood to be ‚actively considering the issue of tax domicile“
A Property Authorised Investment Fund (Property AIF) is an open-ended investment company which is a form of authorised investment fund. Its investment portfolio comprises predominantly one or more of:
real property (commercial and residential)
shares in UK Real Estate Investment Trusts (UK- REITs)
shares in certain foreign entities equivalent to UK-REITs
A Property AIF is exempt from corporation tax on a pool of income and gains arising from investment in the type of property assets listed above.
The investors in a Property AIF will then receive the income arising to the tax-exempt pool as a Property Income Distribution (PID) which is treated for the investor’s tax in the same way as the profits of a UK property business.
Investors may also receive two other types of income from a Property AIF:
PAIF distribution (interest) – treated by the investor as a payment of interest
PAIF distribution (dividends) – treated by the investor as a UK dividend (and which carries the same tax credit as other dividends)
All individual investors will receive a PID and a PAIF distribution (interest) after deduction of basic rate income tax. Some other categories of investor are entitled to receive payment without deduction of tax.
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Today, the FT reports that figures from the National Audit Office indicate that one in three of Britain’s biggest businesses pay not tax.
Read the full article here A third of UK’s big business pays no tax
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