Have to say I agree completely with Gavin. The cost of the SPV (special
purpose vechicle) is small. It is easy to set up and administer (I know I
have done this).
SPV owns all the revenues from the US/wherever and it pays MEGames in
Cardiff an agreed fee to run the game. This would be tax deudctible in the
US and taxable in the UK (a chance for arbitrage here leave profits where
the tax regime is low).
Any trips to the US for Clint & Co could be claimed as a business expense
and offset against the SPV's income (think of it Clint the IRS paying some
of the airplane fee).
There are more ways than one way of getting the cash back to the UK
as gavin mentioned
- dividends (there is with holding tax in the US so maybe not the way you
really want to go)
- management charges (tax deductible in the US taxable in the UK)
- lend the money back at an arms length interest rate (interest is taxable
in the US and tax allowable in the UK - could help offset against the above
thereby leaving ME whole with no tax payable in either direction)
- distribution of capital (return of shareholder's capital). Treated in UK
as a capital gain (depending on the tax position of ME in the UK this could
be beneifical)
There are 1m variations on the above but as I said previously this is not
something that should just be ignored
Cheers
Jerry
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