Business across borders, structured before it gets expensive.
A UK limited company with an American owner is a US tax event every year. Expansion in either direction raises entity choice, permanent establishment and reporting questions that are far cheaper to answer before incorporation than after.
Your limited company is a CFC to the IRS
A US person owning a controlled foreign corporation files Form 5471 — one of the most penalty-laden forms in the code — and GILTI can pull the company's profit onto your personal return years before you pay yourself a dividend.
Elections exist that change the outcome entirely: check-the-box, Section 962, salary/dividend mix. The right structure depends on numbers, and we run them before you commit.
- Form 5471 and GILTI computations
- Entity classification and check-the-box planning
- Permanent establishment risk assessment
- US LLCs owned by UK residents — the reverse trap
Expanding is easy. Unwinding isn't
The wrong structure rarely hurts in year one; it hurts at exit, when the sale is taxed through a lens nobody considered. We structure for the eventual disposal, not just the incorporation paperwork.
The operating layer: payroll, VAT and filings
Once the structure exists, the running of it begins: payroll withholding for staff in two countries, VAT and sales tax registrations, corporation tax and federal returns, and the intercompany agreements that keep transfer pricing defensible.
We run that annual cycle as one calendar across both jurisdictions, so the company's filings land on time everywhere and the owners' personal returns pick up the right numbers without a scramble.
- Cross-border payroll and employee equity reporting
- VAT / sales tax registrations and returns
- One compliance calendar across both jurisdictions
What the fixed fee includes
- Entity choice memo before you incorporate
- Form 5471 and GILTI computations
- Check-the-box and Section 962 modelling
- Salary/dividend mix optimised annually
- Permanent establishment risk review
- Transfer pricing documentation
- Cross-border payroll and equity treatment
- Exit structure planned years ahead
How the engagement runs
Often handled together
Questions we get about this
It is a US regime that can tax the profits of a controlled foreign company in the owner's hands before any dividend is paid.
It catches a lot of ordinary owner-managed UK companies whose owners are US persons, which is rarely what anyone expected when incorporating.
The UK answer and the US answer frequently differ, because the two systems treat distributions and employment income differently.
Optimising purely for one side is how owners end up with an efficient UK position and an expensive US one.
If entities in both countries transact with each other, the pricing needs to be defensible and, above certain sizes, documented.
Even small groups benefit from a written rationale, because reconstructing one during an enquiry is considerably harder.
It can. A US person controlling a foreign company generally picks up reporting on it, and in some cases the profits are taxed to them before any distribution.
The thresholds turn on ownership and control rather than on whether money ever reached you.
It is the risk that activity in the other country is substantial enough to create a taxable presence there, even without a formal entity.
A single employee or a habitual contracting arrangement can be enough, which is why expansion is worth structuring in advance.
It depends on where profits arise, where the owners are resident, and what you intend to do with the proceeds later.
The structure that minimises tax in year one is frequently not the one that survives an exit well, so both are worth modelling together.
Related pages
- Service
Trusts & estates
Cross-border trusts, gifts and inheritance: US-UK estate planning, foreign trust reporting and the forms that catch families out.
- Service
IRS Form 5471
Form 5471 explained: filer categories, controlled foreign corporations, Subpart F and GILTI, required schedules and the penalties for late filing.
- Who we help
Businesses expanding abroad
US and UK businesses expanding across the Atlantic: entity choice, permanent establishment, transfer pricing and payroll.
- Pillar guide
Accountants for US and UK
How to choose accountants for US and UK tax: what each credential permits, how to verify it, what drives the fee, and when you do not need a specialist.
- Pillar guide
Tax specialists for US and UK
What US and UK tax specialists handle that a general accountant does not: residence tests, treaty relief, FBAR, PFICs, pensions, property and catch-up filings.
- Who we help
Planning a move
Moving between the US and UK: pre-move planning, split-year treatment, and the decisions that are far cheaper made before departure than unwound afterwards.
Further reading
- The dividend withholding rate under the US-UK treaty, explained
The treaty sets three possible caps on US dividend tax for UK investors: 15%, 5% and zero. Which one applies depends entirely on who owns the shares.
- How to avoid double taxation between the US and UK, mechanism by mechanism
Both countries can tax the same income - yet almost nobody should actually pay twice. Four mechanisms do the work, and the order you apply them matters.
Official sources
Last reviewed . Thresholds and rates change annually — check figures against the current tax year before relying on them.
Running a company across both countries?
We will map the reporting your structure creates and whether the structure itself is still the right one.