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Hi Sophie, if the PR services are performed on behalf of your UK Ltd in order to generate revenue / profits for your company, then you can use Article 7(1) Business Profits at 0%. This is essentially a catch-all article for every trading business that sells products or services.

Understood. Thanks for your help!

Hi, yes in the cases where the properties are being held for rental, airbnb, farmland etc then it would be a trading business. Even though the UK Ltd is a UK resident company, the ownership of US based assets means that the IRS would consider income derived from these assets to be US sourced income (you'd effectively have a US Permanent Establishment) and they'd expect a US tax return filed to declare the income from these assets. On the UK side, you would be eligible for double taxation relief - any US taxes paid would be credit against your UK corporate tax liability.

Thank you for the reply. I thought that this might be the case. Which forms would the uk company file with the IRS? Would it be more tax efficient to hold US assets in a US Ltd company?

​@@midnightsky2933 The UK Ltd would file Form 1120-F - this is essentially an income tax return for a foreign company, similar to a UK corporate tax return but it only declares US based assets for the UK Ltd. In terms of actual tax owed, generally it's going to end up the same net result whether its held by the US or UK Ltd. But setting up a US company might be a little more burdensome overall because this would involve setting up a company, filing annual accounts / us corp tax returns etc, whereas with it in the UK Ltd company name you just have the one form to do essentially.

@@WorldTaxAndy thank you so much. If only the tax office were as helpful. I've learned so much from watching your video and your replies... finally realized what I was doing wrong filling in the exemption form. I have a US social security number and I always put in that number as tax payer identification number while claiming tax residency ... no wonder people are confused ... they are probably wondering what idiot filled in those forms. Well, at least from now on I'll get this right 😊

Hi, thanks for the kind words - and yes meeting one or two ties on their own thankfully doesn't screw you! We get to look at the entire test holistically, and if you only have 2 ties to the UK then you can stay up to 90 days per tax year (and ensure you spend 91 days or more in at least one other country).

@@WorldTaxAndy Thanks a lot for the reply Andy. Subscribed. I look forward to checking out your other videos.

@@WorldTaxAndy Just been doing a bit of planning tonight Andy. As I have family in UK, I'd want to be fairly close to them much of the time. With that in mind, would the following work re CGT ..... Isle of Man 95 Days, UK, 90 days, Europe 90 days, Central America 90 days = 365 days. Only selling eg crypto during my 95 days in Isle of Man.

@@ProfRogers Yes that would certainly work so long as only 2 ties are met. Note, you could also sell crypto whilst you're in the UK during your visits back, because when you're a UK non-resident, you're counted as a non-resident for the entire tax year. So selling crypto wouldn't be subject to CGT in the UK even if you did this on a trip back, so long as you meet the definition of non-resident under the SRT.

@@WorldTaxAndy Ah that's great thanks Andy. Makes sense. So I guess my strategy would be: 1) let HMRC know Jan to Mar that from 6th April I would not be a UK Tax Resident 2) sell eg crypto anywhere, anytime in that year 3) follow the 95 (IOM)-90 (UK)-90 (Europe)-90 (Central America) living strategy for 5 years. A further question that springs to mind is .... 1) Is it compulsory to be a Tax Resident SOMEWHERE? Is that a compulsory obligation on a world citizen? (NB To be a Tax Resident on IOM you have to spend 183 days a year there.) And oops sorry, another question is .... If I sell eg crypto in Year 1, and spend 5 full tax years with the above living strategy, that would be cool. But lets say on Year 5 a great opportunity presented itself to make a big sale .... does that mean I would have to stay a FURTHER 5 full tax years to avoid the CGT on that?

Hi @Frag1ty yes I've seen a few cases where this has been assessed in PH and the key focus has been on the location of the underlying assets - if there were any FIlipino stocks traded then they might decide this as PH sourced income, but if you're purely trading US stocks then you shouldn't have any concerns. That said, to avoid questions and potential bureaucratic hassle, it would be best not to cash out gains into any Filipino based bank account, and just use another personal bank account that you have access to if possible

Hi, when it comes to longer term basis (i.e picking up a tax residency) it would be good to have somewhere that's friendly to foreign capital gains e.g Malaysia, Thailand, Philippines, Uruguay, Paraguay etc. That said, being tax nomadic is still an option. I know a lot of traders who simply don't change their address (it of course will depend on how strict the brokerage is) or they pick a temporary address in one of the places they have resided in (that has a tax friendly status) so they have some backup argument in case they're questioned. Generally what I find is that brokerages, banks etc are not really concerned about your tax residency, but they're often legally obliged to know where their customers are for regulatory reasons, so they'll ask for tax residency details as a proxy for 'where do you live'. So you'll often find no further questions if and when you do change your tax residency. But I guess this one is quite case dependent and highly dependant on the actual brokerages you are using.

Hi Damian, no this in itself does not create any tie for your UK residency status. It's all about where you are - the people you work with (colleagues, contractors and even clients) are not important here, it's all about where you physically spend your time, where you work from etc. For reference I live abroad but I have a UK company, I occasionally employ UK contractors and have some UK clients - but none of this has any bearing on my personal residency position.

Hi, thanks for the kind words - I would say generally no, its unnecessary. I work with a lot of Amazon FBA sellers from the UK and they tend to use a UK LLP or UK Ltd for Amazon FBA US sales and these work well. There are other seller platforms which can benefit from having a US LLC, as you'll find a lot of US-centric marketplaces will require you have a US company. But thankfully Amazon has no such requirement. That said, it might still be useful to have a US LLC (this can be more tax efficient in certain cases) however they're more expensive to set up than a UK company (typically you're looking at $500 or so per year for an LLC vs just £12 on Companies House for UK companies) so that would have to be weighed in.

Hi, in your case you will certainly be non-UK tax resident and given the SIPP is in IoM this is not UK sourced income, so the UK should have zero claim over any of your income tax. As far as I'm aware the two main options would be: - R34 form www.gov.uk/guidance/claim-personal-allowances-and-tax-refunds-if-you-live-abroad, OR - Filing a self assessment tax return for the years in question, which will declare 0 tax owed for the years in question, which would then show up as a repayment owed to you. This route is a lot more hassle though

@@WorldTaxAndy Thank you. I have a feeling they don't recognise my non-residency for some reason but I'll try option 1 (R34) to start with anyway.

Thanks for the kind words, I had nightmares about this form myself when I first had to fill one in a few years ago, so very glad this was useful.

Hi mate, so you're in a good spot if you want to keep UK tax residency (makes sense if the ISA / pension is an important part of your investment plan) as HMRC is usually worried about this when its the other way around! So, essentially you'll get no complaints from them if you claim yourself to be UK tax resident, because they're always happy to keep as many UK residents on the system as possible. But yes technically under the rules, with 4 ties you can guarantee UK tax residency with just 17 days or more in the UK. From the Colombian side, they would typically claim you as a tax resident with more than 182 days in the country - but like you mentioned the double tax treaty is what protects you here - under the UK/Colombia tax treaty, where you are considered tax resident of both, there is a tiebreaker clause (Article 4) which determines who gets your tax residency. And this is subjective but it looks at your 'centre of economic and personal interests'. So this is typically where you have your investments, bank accounts, family and even friends. This can naturally be subjective but if the majority of that stuff is in the UK then you are a UK resident under the tiebreaker rules. Since you mentioned ISA/investments in the UK, this is the perfect demonstration that your economic interests remain in the UK. To keep extra cautious, I'd also keep open any UK personal bank accounts that you have.

Hi, thanks for the kind words - yes, this option (Company with an item of income that meets active trade or business test) is still good for the purposes of the W-8BEN-E in your case - whether or not a product has been sold is not as important as the intent - if the company is set up with the purposes of generating its income from an active business then this box would still be suitable. As a general rule of thumb the W-8BEN-E forms are usually required to be collected by the US party every 3 years, so the form is completed on the basis of the company's most likely status over the next 3 years, and so if the product is expected to be sold in that period, then this still makes sense to choose.

@@WorldTaxAndy A product will be sold in a couple months at most, this is great then. Thank you so much for your quick response!

Thanks, appreciated it! I was in Palawan for a while but I'll need to check out Southern Layte next, heard great things!

Hi Nathan, thanks for the kind words and glad it was useful. So yes, the US thresholds apply regardless of your company's jurisdiction. For example, if you make over $500,000 of sales into California, then you will usually have to charge Californian sales taxes on your products to clients there. This is similar to UK VAT in the sense that only the customer location is relevant, your business could be in any country but will still have to account for VAT if you cross the UK VAT sales threshold.

Hi, thanks for the kind words. No, not necessarily, there are many cases where you can still have your residential property and be non-UK tax resident. Even if the accommodation is available to you, this in itself creates one tie, but your status will depend on how many other ties you meet. So you might still be in a position where you have a low number of ties overall meaning you remain outside UK tax residency. Note, the one rule you could be caught by is the automatic residence test which applies when your only home is in the UK. HMRC may try to claim this to be your home (even if your siblings live there meantime) so to protect against this you'd have to have somewhere abroad you could point to as a home in which you spend at least 30 days in the tax year in. Note, you don't need to own it, it could simply be a rental property, long term lease, or even an airbnb in which you rented out multiple times in the year.

Hi Martin, that's generally the case if you are a tax resident of another country which has a double tax treaty with the UK. In most cases, becoming a tax resident will mean spending 6 months in that country. This applies to most EU countries. In which case the double tax treaty will protect you from tax in most cases, however the UK can still charge UK tax on UK rental properties.

Hi, thanks for the kind words and yes no problem at all, feel free to use and share any content you want. Also I've followed your channel and good to know what you do. UK property investment structuring is certainly way beyond my expertise, but I occasionally work with non-residents who may well benefit from your experience there.

Hi Paul, generally this wouldn't be considered a break if you were actually working. Thankfully the SRT does not require you to have a formal contract in place for a day to be considered a work day. As long as you have some sort of justification that you spent 3 hours or more on work related activities - this could be your visa setup, lining up contracts, client meetings, research, marketing etc - then these still count as work days, so if you did this for the 35 days abroad, you wouldn't have to worry about the 'break' in work.

Thank you - I can stop worrying then! Phew….

Hi, generally no if you're not a Filipino citizen, because these will usually be considered as foreign sourced income thus outside the scope of PH taxes. For crypto, you'd want to ensure you're not trading on any Filipino exchanges to avoid it being considered locally sourced.

@@WorldTaxAndy That's a wise answer. Many thanks.👍

Hi Wayne, thanks for reaching out and yes happy to help out with this - by the sounds of it with your full time travel it's highly likely you're non UK resident so that's a great starting point for tax efficient but happy to dive into more detail over a call.

Hi, thanks for the question and I’m quite alarmed by this because it would rip apart so many plans people have put in place based on the current rules. For now it seems to be conjecture & speculation but often in Thailand it seems there’s no smoke without fire. This would be extremely dramatic and bring Thailand into line with most Western countries (ie taxing residents on all worldwide income). If the story is true, I’m concerned that its coming from pressure from external forces like the OECD. Its also strange timing given it was only last year the latest set of new rules were announced, which were pretty significant themselves. Typically you wouldn’t expect to see such drastic measures introduced so close together. I’ll keep digging on this and try & get as much insight from across my network in Thailand as I can because this is going to be extremely important for people in your position, or which there’s thousands now

@@WorldTaxAndy​​⁠thanks you so much. would be shocked if this is true. I would be extremely disheartened if they voided the double tax treaties that are in place with 61 nations. With the treaties in place, it would only be targeting those living a 0% tax life.

@@mlgneo2855 Don't worry at all on Double Tax Treaties - this is a separate issue. What is being rumoured is changing Thai local tax law to make it on a worldwide basis, but this still means that you'd be covered by Double Tax Treaties if you were taxed elsewhere (in a country which has a DTT with Thailand). So yes its the people living 0% tax at the moment who will likely be hit if this does come to pass. (double tax treaties virtually never get ripped up - and the process of doing is extremely long and drawn out, because DTTs are more wide ranging than just tax, they're basically a form of international trade deal and these involve multiple layers of negotiations between governments. Thailand would have no incentive to do this, especially given they have 61 of these treaties). Unless they planned to be a North Korea-esque hermit kingdom, but hopefully that isnt on the cards any time soon... :)

Hi, thanks for the question & yes there are still ways in which people can get away with minimal taxes. Unfortunately, the brutal reality is that the methods tend to be reserved for the elite rich because a lot of the structures are extremely expensive to set up and maintain. When I worked for a big 4 firm in London we often advised large hedge funds, insurance firms etc on structures which enabled their key staff to live mostly in the UK but still pay minimal taxes due the company structure. For example, many London hedge funds incorporated parent entities in the Channel Islands such as Guernsey where they usually pay no tax. In order to justify most profit going through this entity, the key staff would fly from London to Guernsey at least 4 times per year where they'd host board meetings, discuss key strategic decisions of the business etc. And on paper, they could usually claim that the key business is operating from Guernsey. To justify the economic reality of this (and to counter any HMRC accusations of it being an artificial tax structure) they would also open a physical office in the Islands, as well as hiring directors who live there full time along with other admin staff. All in these kind of set ups may cost the business £1m per year annually in operating expenses, but when you're a billion pound hedge fund, the tax benefits massively outweighed the costs. But for the average person this just doesn't add up. On top of that, some of the directors in the UK may also be able to claim 'non domicile' status (though this is finally changing in 2025) which would allow them to not declare any of the income they made from the company so long as it was held offshore. But this is all just one common example, and ultimately there's a myriad of ways top lawyers are constantly working on to exploit loopholes. But anti-avoidance rules are getting more widespread and closing loopholes all the time, and it is harder than it was 20 years ago to implement aggressive avoidance strategies. That said, its always the people at the very top wealth brackets that can still access the methods that do exist

@@WorldTaxAndy Thank you for the very detailed answer, couldn’t a person the UK just open an LLP have a UK LLC as a partner then a Cayman Islands LLC as the other partner. I’m talking from a perspective of if this person has a lot of money

@@GOATLAVISH777 its theoretically possible, yes, and there’s certainly ways in which that could avoid tax (at the company level). You’d always have to keep mindful of the UK central management and control rules though - if you give HMRC enough ammo to determine that the company is managed & controlled from UK then they may still subject the whole structure to UK corporate tax. At a personal level, you would still be paying UK income tax on salaries / dividends taken from the company, but often people will take minimal income from the business for years, let funds build in the company, then move abroad to somewhere like Dubai where there’s no income tax & take it all out then. Just one of many strategies that does get used by some wealthy Brits

@@WorldTaxAndy That makes sense so pretty much if you want to live and operate from the UK then you’re screwed unless you pay companies like PWC or Deloitte to structure it for you. Funny you mention hedge fund earlier because that’s exactly what I’m looking to do but I have all my family in UK I don’t want to have to move to Dubai

Thanks Garry - these are cumulative days. So you should always work out the total number of days spent in the UK in total between 6 April and 5th April of the following year. Note that a UK day counts as a day in which you were present at midnight at the end of the day. So for example, if you arrived in the UK at 5pm on the 23rd of May, and you left the UK again on the 24th of May at 5pm, this would count as 1 UK day. This is because you were present at midnight of the end of the 23rd, meaning the 23rd counts as a UK day. However the 24th doesn't count as a UK day because by midnight you were somewhere else. So its worth keeping this in mind if you're travelling and trying to work out days spent

Thanks for taking your time to respond and help Andy, very nice gesture from you. In my case, i feel i have been misinformed by my UK employer. I live and work in the UK but for family reasons i have to travel between EU and UK. Since I am almost coming to an end of 3months consecutive stay outside of UK, HR from my employer now raising it as a big issue and asking me to return immediately or resign citing that I will become a non-resident from UK perspective and they do not want to deal with double taxation etc. Is there an official reference that i could send it to the HR to prove that its not CONSECUTIVE Days but CUMULATIVE. Thanks again.

@@gowthas Hi, no problem at all. So it definitely seems like you've been misinformed. I would refer them to the Finance Act which is the UK law definition of the statutory residency test.(SRT) www.legislation.gov.uk/ukpga/2013/29/schedule/45 within this you can see that they are referring to total days spent in the UK over the tax year, ie on a cumulative basis. There is no mention of consecutive days - the only thing that is relevant is a holistic view of your days spent in the UK over the year. Also, because the SRT is complex and case-specific, the test is very personal - that is to say, your employer generally cannot determine whether you are a tax resident under the SRT, because it will often depend on ties to the UK which they may not be aware of. This is ultimately your own private matter and if you ensure you still qualify as a UK tax resident then they essentially have to take your word for that. If they query it, you can indeed provide the evidence for this, but its absolutely not something they should be concluding before consulting you.

That's awesome. Thanks a lot again 👍

Hi, thanks for the kind words. So generally you can do this on their online e-registration portal but for some reason this is down at the moment. www.lamudi.com.ph/journal/tax-identification-number-philippines/ However, you can also visit a BIR office, there are 19 across the country: www.bir.gov.ph/index.php/contact-us/directory/regional-district-offices.html They will ask you to fill out Form 1904 which asks for basic details (name, date of birth, address etc) They will also ask for other documents (usually passport, visa, proof of address). Once that's done it will all be submitted for processing - this can take between 5 days to 4 weeks typically.

Hi, indeed its a minefield and every person's situation is unique and complicated by the absurdly long winding UK tax legislation, however, thankfully we don't have any exit taxes in the UK at the moment. There are exit taxes similar to what you've described in a lot of Western European countries as well as Canada, US and Australia. And whilst its easier to leave before April if you want to avoid being a UK tax resident, you can still do this partway through the tax year. For example, lets say the bull market peaks in December and you wish to sell then - you may leave the UK in November, and claim 'split year' treatment which is a stipulation in UK tax law which, in simple terms, means that if you left the UK during a taxyear to permanently move abroad, you can eliminate the taxes due from the date after which you've left the UK. There's a lot to this rule, and it can get complex, but its an option available even if you didn't manage to leave the UK early in the tax year

Hi, yes this is a common misconception and thankfully we don't need to obtain EINs which can be a burdensome process - the UTR is sufficient here

@@WorldTaxAndy Thanks, appreciate it. I’m in the process of contracting for a US business via my Ltd and that form looked really confusing!

@@WorldTaxAndy sorry just a quick question, I sent this across to my accountant and they’re adamant that the TIN would be Company Number rather than UTR, they referred me through to this - www.gov.uk/hmrc-internal-manuals/international-exchange-of-information/ieim902330

​@@jasonfashanu9652 Hi Jason, it's likely that the company number would also be acceptable. I've seen numerous IRS audits of W-8BEN-Es over the past decade and I've never seen them rejected on the basis of using the UK company number, or even in one case, a VAT number. However this isn't what I've seen most commonly used in practice - I'd estimate that 80-90% of forms are submitted using the UTR. This is because the IRS adheres to the OECD's definition and guidelines for TINs. The OECD only references NINOs or UTRs as equivalent UK tax identifying numbers. Personally I've always been more comfortable with this interpretation too given its a specific tax identifier rather than a general company identifier. But as above, its highly unlikely to be rejected even if you do go with company identifier - worst case scenario during an audit is that the IRS could simply ask the US client for the UTR if they really needed it (these audits are quite uncommon). www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-identification-numbers/UK-TIN.pdf

@@WorldTaxAndy that’s perfect thank you, I came across that same link from the OECD and based the submission on that. Thanks again, this really helped with navigating the form !

Hi, this option would only apply if UK residents have 50% or more of the voting rights in the UK Ltd company so we'd have to choose one of the others. The most common would be "Company with an item of income that meets the active trade or business test". This essentially just means that the company is actively trading outside of the US, and that its non-US activities are larger than its US activities. Alternatively, you can choose: "Other" and reference Article 23 paragraph 6. This basically confirms that you did not set up your UK Ltd company purely for tax benefits under the double tax treaty - you set it up for some sort of other commercial reason.

@@WorldTaxAndy Thank you so much for the detailed answer :) I could not find it anywhere else.

@@WorldTaxAndy if we tick "Company with an item of income that meets the active trade or business test", would still the article 7(1) be applicable or another one? What would be the 'justification' given in point 15 then? Thank you for your answer in advance, the video is brilliant! Greetings from Poland :)

@@KatarzynaN-zi6 thanks for the kind words! Yes in this case 7(1) would still be applicable, as long as the income you are receiving from the US is some form of business income / business profits. Section 14b doesn't impact section 15 at all - 15 will always be solely dependent on what type of income we are getting from the US.

@@WorldTaxAndy Awesome, thank you! Your channel is a life-saving place in the Internet! 🤩