Cayman is a tax neutral jurisdiction – there are no capital gains, income, profits, withholding or inheritance taxes attaching to investment funds established there, nor to investors in such investment funds;
Apparently 90% of all hedge funds are based there?
So has anyone tried to do it themselves…
With my paltry few grand, I’m considering
If I get a stack of money…I would!
How tricky is it though?
There are threads dealing with offshore accounts on Babypips.
But 1 big thing to consider is that the Tax Office in your country will find out about your offshore accounts sooner or later. Probably sooner. A cayman Island account or Bahamas or Panama, etc is a big red flag.
On the upside, if you can find a GOOD accountant, there are lots of ways to legally minimize your tax. Ways you would never think of.
My advice find a Good accountant/solicitor who specializes in wealth management and save a crapload of tax and problems.
This is based on problems I had and continue to have with tax issues.
Sorry I don’t mean hiding the money as that would end in trouble.
What I mean is registering a company offshore and doing business through that.
I was reading an article in a UK national paper which said,
If you try to open a hedge fund in the UK the FSA wouldn’t know what to do
as no one does it.
Also in the same article is said first thing to do is to get a brass plaque overseas…
You will need atleast 1m capital to consider starting a hedge in uk. Most likely more. Costs are high just for the application process
It is definitely worth doing this if you have enough to make it worth while.
For a ‘few grand’ it wouldn’t be cost effective though.
You would need to talk to a local law firm who specialise in setting up accounts like these (there are a few) and find out start up and on going costs associated with such an entity. Once your profits start generating a tax bill bigger than this amount it is worth moving your money there, perhaps slightly earlier.
If however you are making a grand a year profit, and paying 50% tax and it costs 10 grand to set up an account and annual running costs are a grand a year you will be going backwards.
Hi, I am from the UK and I have opened an account with FXCM. Its a spread betting account but with no dealing desk. this type of account is exempt from capital gains tax here in the UK and therefor I will pay no tax on any of my profits. the only drawback is wider spreads, so no good for short trades or scalping.
My spreadbetting account is with IGindex. Much more reasonable spreads. And when you hit the buy or sell button the order goes in as a limit order not a market order so no slip either. (I can only think of one time where I got requoted without being filled, but the platform does have an option to use standard market orders if you wish). No affiliation, just a satisfied customer.
Deals with a great amount of intellect and practical thoughts to trade this way. May be too far from my capability, have never thought about it so far.