A Profitable Way Out of Brexit for Wealthy UK Residents

Jan 29, 2019

Are you looking for migration opportunities because of Brexit?

The Netherlands offers a wholesome package with an outstanding healthcare system and a steady top ten World Happiness Index ranking. The Netherlands is by far the best friend of the UK on the European continent with a very good physical (Schiphol, Rotterdam / The Hague and Eindhoven airports), IT, legal and tax infrastructure. What’s more, the tax system offers many benefits for individuals and companies combined with a very extensive tax treaty network. We at Migrantic tax & immigration lawyers offer a tailormade approach to your tax structure, which can be up and running in a week if necessary. Additionally, you will not risk overbilling due to our case-specific expertise and 30 years’ experience. Let us tell you how this works.

According to the latest Brexit news, it looks like Britain is heading towards the cliff of the no-deal hard Brexit. It seems that UK Parliament cannot find a majority for any solution out of the deadlock; Plan A and Plan B of Theresa May, new elections with a much dreaded Corbyn government and a new people’s vote all seem to fall victim to a severely divided Parliament and country. Moreover, the EU will never agree to removing the Irish backstop. Many people (expats, businesspeople and wealthy individuals) in the UK, who are currently taxed under the favourable UK “non-domiciled” tax regime, are looking to leave the UK as soon as possible, before March 29, 2019.

Taxes United Kingdom vs. The Netherlands
Under the ”non-dom” regime, the person who is not domiciled in the UK (i.e. does not have the UK as his or her “home country”) is generally only taxed on income derived in the UK or remitted to the UK. The UK is therefore a fiscal paradise for foreign (wealthy) individuals and captains of industry who do not have their domicile (roots) in the UK.

Did you know that also the Netherlands can be a fiscal paradise for foreign wealthy individuals as well? Moreover, nationality or domicile is totally irrelevant in this Netherlands tax regime. A similar (or even better) situation compared to the UK remittance base regime can usually be set up in the Netherlands for wealthy individuals (including UK nationals) emigrating to the Netherlands who generally speaking have not been a resident of (or close to) the Netherlands for more than 5 years in the last 25 years. Qualifying people do not have to even report their non-Netherlands source assets at all.

With the right planning, our immigration law department can also arrange Netherlands work authorisation and therewith a Dutch residency permit for the entire family for non-EU and non-EEA nationals moving their residency to the Netherlands. Therefore, if the UK leaves the EU in a no deal scenario or in any other unfavourable manner, we at Migrantic can ensure your stay as a non-EU national in the Netherlands for at least 5 years.

Expat Tax Structure
The benefits of the Dutch facility – which has a maximum duration of 5 years – are substantial, for instance:

 1.  The migrating individual does not need report any income at all to the Dutch Tax Authority (except for Dutch source income, such as income from a Dutch company or from Dutch real estate);
 2.  The individual specifically does not need to report income from investments abroad or from a foreign substantial interest (dividends and capital gains from closely held companies, >5% owned).

The Dutch facility takes some Dutch tax planning and setting up a Dutch company but it can certainly be done.

This structure does not only work for ‘Brexit fugitives’ but for all persons around the world with substantial portfolio investments who are considering to move to the Netherlands and are willing to do some (consultancy) work for their own company.

Tax Benefit Example
Here is an example of the possible monetary benefits of the Migrantic structure:

If this is something you would be interested in, then please contact us. If you have any other questions regarding your move or immigration to The Netherlands, don’t hesitate to call, we are happy to help.

Please e-mail our international tax lawyer Leon van Baal on l.vanbaal@migrantic.com if you need further information on (the details and expenses of) this structure.