I have a client who owns a corporation in the UK and wants to take advantage of the non-sports betting rules for a tax exile. He has a very specific plan and wants to know if it’s possible to put it into practice.
The UK government has a set of rules that apply to anyone who wants to carry out gambling activities from outside of the country. The legislation, which came into effect in December 2016, limits the ability of individuals to engage in offshore sports betting to residents of UK jurisdiction. It also limits the total amount that an individual can earn from such activity to £1000 per month (£10,000 per year). In addition, anyone found to be involved in illegal gambling will have their assets frozen and a criminal record created.
However, if your business is located outside of the UK (i.e. not registered in an overseas country) and you want to engage in sports betting, there are still options available to you. The best option is to set up a company in a low-tax rate jurisdiction, such as the Seychelles or the Isle of Man. You will then need to appoint a nominee, who will be the actual owner of the business, to operate the company on your behalf. The profits of the business can be taxed in your jurisdiction of residence, and you can also send your employees to that jurisdiction for schooling if you require.
As mentioned above, the UK legislation applies to individuals, as well as the businesses which they own. The rules also stipulate that all sports betting activity must take place in a licensed sportsbook. Local bookmakers who previously catered to a UK audience must upgrade their infrastructure and acquire a license from the British government if they want to continue providing services to UK gamblers. The process of getting a license is very expensive and involves a long wait. In addition to this, accepting payments in cryptocurrency incurs an additional layer of risk from fraud. With fiat payments, the risk of chargebacks is far more manageable.
If you’re looking to make a corporate or trust formation to do offshore sports betting, consider the Seychelles or the Isle of Man as your jurisdictional base. In addition to having low-tax rates and few restrictions, the former provides an additional layer of privacy and confidentiality for your business structure.