Topic overview

International tax planning

International tax planning{{}}International tax planning can be essential for both businesses and individuals. At the very least, you must ensure you are complying with UK and overseas tax requirements. Yet effective international tax planning can enable you to reduce your tax bill.

International tax planning for businesses

If your business operates internationally, you need to understand the implications of overseas tax rules. Even if you are based entirely within the UK, you will probably have to pay VAT and customs duties on imports and deal with tax on exports.

International tax planning for businesses with an overseas presence can be a lot more complex. As well as paying local overseas taxes, you will need to ensure you comply with regulations covering issues such as transfer pricing — designed to reduce the scope for businesses to artificially transfer profits to countries offering more favourable tax treatment.

At the same time, international tax planning can offer increased opportunities for tax mitigation. For example, you may be able to organise cross-border financing in a way that makes the most of tax relief on interest payments. There may also be an opportunity to reduce tax liabilities by holding intellectual property offshore.

International tax planning strategies also need to take into account the double taxation treaties operating between different countries and how tax works on international payments of interest or dividends.

International tax planning for individuals

International tax planning can also be important for individuals. This is particularly true if you operate internationally (eg working as an expatriate overseas), are not UK-based for tax purposes or simply have substantial assets you want to protect.

Again, an overseas presence (eg working overseas or owning property in another country) may mean you are subject to overseas taxes. These can include unexpected consequences, for example, if overseas property becomes subject to local rules on inheritance tax or an unplanned beneficiary inherits your estate.

Offshore tax structures can provide opportunities for international tax planning. Other opportunities can arise for internationally mobile individuals, for example, if you are considering emigrating prior to selling your business.

International tax planning advice can help both individuals and businesses to identify how best to minimise UK and overseas tax liabilities.

Related articles and resources

You may find the following articles and resources useful: