It may therefore be particularly helpful where an individual is setting up a business in the UK and may, initially, spend more time there.
Pre-arrival planning should also consider any existing business interests of the owner, particularly those carried on through US LLCs.
These are normally treated as transparent or pass-through entities for US tax purposes, but are generally regarded as opaque in the UK, where there is no equivalent to the check the box election.
In addition, companies that are managed and controlled from the UK will be regarded as UK resident, in contrast to the position in the US, which only treats companies incorporated in the US as resident.
There is therefore a risk that an individual moving to the UK will render any LLCs he/she controls UK-resident companies, and its profits subject to two levels of tax in the UK, as any distributions from the LLC would be taxed in the hands of the shareholder.
If UK tax residence is likely, the business owner will want to consider carrying out pre-arrival planning to ensure that UK expenses during his/her residence can be met tax efficiently.
This should also factor in the nature of the business and whether significant sums will be received while UK resident.
Ideally such planning would be addressed around a year prior to arrival.
James Ross is a partner, Nicola Allison is a senior associate, Bridget Winters is a senior associate and Rachel Davison is a partner at Taylor Wessing.
