# UK Tax: avoid income/CGT tax on stock options



## jtt23 (Oct 25, 2013)

After receiving some very useful, free advice on tax on this forum, I have a new query:

*The facts:* I work in the UK and I am currently being awarded some stock options in the Swedish parent company ahead of an IPO in 1-2 years. I paid for the options, so no tax is due on them now. However, after the IPO I will be able to exercise the options and buy shares at strike price [x]. I understand that at that point I would pay UK income tax on the difference between [x] and whatever price shares are trading at. I will then have to wait out my lock-in period before being able to sell the shares and potentially incur CGT if price goes up. The options get released over time, but my employer has generously allowed me to transfer my options to a company if I wish. I also (coincidentally) plan to move to an offshore jurisdiction after this because my spouse will work there. The shares will hopefully be worth a few hundred thousand, so I would love to avoid the tax but it's not a huge thing (or I would go to a tax lawyer). 

*My plan:* (1) Open offshore company, OffCo, which has an offshore bank account. (2) Transfer options to the offshore company now. (3) Inject equity to OffCo after IPO from my savings (4) OffCo exercises options using my cash and buys shares at [x], but no tax is due. (5) OffCo sells shares after lock-in period expires, but no tax is due. (6) I move to my new offshore home and start my new job there. I stop being a UK resident for tax purposes. (7) OffCo pays out a dividend to me, but no tax is due. (8) Money is in an offshore bank account in my name.

*The question:* Does this work? Is there risk from a UK tax point of view?
*Bonus Question:* If you think it's viable, do you have recommendations for OffCo's domicile (e.g. BVI, Jersey)?

Thank you in advance for all your help!


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