Preventing double tax during an international secondment?
Our client had been seconded to his employer’s Paris office, the challenge was that he was considered resident for tax purposes in both the UK and France. A common problem in these circumstances.
He came to us for clarity on a) how his income and bonus arrangements would be taxed and b) how his carried interest in the business would be taxed and, most importantly, where?
- After reviewing the UK/France double tax treaty we concluded our client had an arguable position that he would continue to be considered a UK tax resident.
- When looking at his carried interest, it was imperative that, post exercise, the units would, at worst, attract 18% capital gains tax.
- We proposed a structure that would allow the carried interest to be maintained offshore with a resulting tax deferral for our client.