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If you are trading in the UK and you are a director of an offshore company then HMRC will treat your UK company as the profit making entity and apply corporation tax.

If you look at Google's and Amazon's corporate structures, they are a lot more complex than a single offshore holding company.

http://www.hmrc.gov.uk/manuals/intmanual/intm208240.htm

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Interesting reading, thanks for the link. Who'd have known that HMRC used such elaborate language! :-)

In this case I'm imagining only holding shares offshore, not paying dividends, etc. So not sure if that article applies fully. But it sounds like the intention of HMRC is to restrict the ability of companies to move profits offshore to avoid paying UK tax.

The problem is that you'd still be liable for capital gains in the UK if you sold shares held by your holding company. Keeping profits, from a sale or create by the company offshore via a holding company won't be allowed by HMRC.

The only way to avoid it, in event of a sale, is the leave the country and become non-resident for tax purposes.

This document summarises better than me:

http://www.nabarro.com/Downloads/Offshore_tax_residence.pdf

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