This article is for general information only. You should not act or refrain from acting in reliance of it. You should always obtain professional advice on the facts of your particular case. Nothing in this article constitutes financial advice. The owner of this site accepts no liability.

 

For successful UK entrepreneurs, about to sell their companies, relocation to capital gains tax free Monaco is attractive. The key to achieving the right outcome is detailed planning early on.

 

You need to be able to show HMRC that you have ceased to be UK resident before your sale. Ideally you want to leave the UK at least in the tax year before the sale. This enables you to submit a UK tax return at least for one tax year before the sale. This tax return will of course show you as Monaco resident. It will then be up to HMRC to decide whether they investigate further.

 

The likelihood is that HMRC will not accept your non residency without more questions especially if you continue to own a company in the UK. Accordingly you should resign as a working director of the company and appoint someone else in your place. This is usually the difficult parr as you need to show that this person is running the business and is a credible business figure. The person's time running the company is likely to be short which makes recruitment difficult. Obviously you do not want good tax planning to be destroyed by a new person who crashes your business.

 

It is in order for you to have a chairman role and receive updates on the business in Monaco. You should keep any visits to the UK to an absolute minimum. You should not attend board meetings in the UK or visit customers in the UK. Less is very much better here.

 

The sale contract for your business should be drafted on the basis that you are non resident and not committing in warranties to perform any work in the UK.

 

Personal tax planning after the sale is often ignored in the excitement of the sale. 

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