Have any US citizens acquired a UK company?
July 15, 2024
by a searcher from Babson College - F.W. Olin Graduate School in United States
I'm an American living in Scotland due to my previous role as CEO here. I'm launching a fund focused on US-based companies, but I'm now considering UK-based acquisition opportunities.
I've heard there are challenges for US citizens - specifically taxes and owning over 50% of a UK company, which involve significant paperwork and fees. If you've navigated this process, I'd love to hear your insights.
Thanks!
in London, UK
As a starting point and a few ideas -
I think you're referring to the GILTI tax with the 50% ownership piece more info here -https://www.taxesforexpats.com/articles/foreign-business/global-intangible-low-taxed-income-gilti.html
You can reduce it somewhat by having a US hold Co, but still it doesn't get around it fully as the entire point of the legislation is to prevent US companies from offshoring parts of their business. Plus the paper work will still be difficult.
One way that might help is setting up an LLP in the UK which you'd own as a US citizen (or through a US hold co if you'd like even more paperwork), as I believe GILTI only applies to CFCs (Controlled Foreign Corporations) and I don't think this includes LLPs. Of course an LLP has pass through tax advantages as well, so that might help somewhat. You'd still have the paperwork, and you may prefer the UK entity to be owned by a company rather than a partnership.
Another thought is you could bring in some British partners in and buy something larger and but have a smaller stake.
Best of luck with it!
from University of Vermont in Salem, MA, USA