top of page

Basics of Offshore Umbrella Companies

Offshore umbrella companies functions through loans. These actions are based on the pioneer bills the Thatcher government has passed in 1979 that legally permits money to go offshore untaxed. Money goes untaxed until it returns onshore.

This law changed a general scheme for offshore umbrella companies to operate in British places like Jersey, Isle of Man, Bermuda, and others. England’s offshore islands are home to the operations of the world’s hedge funds. The law permits money to go untaxed as long it is held offshore. The Tory Party grandees were the first ones to take advantage of this scheme.

The father of David Cameron built his wealth by setting up schemes for himself and others. Most of the inheritance of David Cameron comes from this manner. Chancellor Osborne also benefited from this scheme as he has held £4.5m offshore in a family trust.

Money of Tory Party

The funds of Tory Party are derived from individuals who operate these schemes. These offshore schemes are managed by Lord Aschcroft who is the Conservative Party’s top donor and fundraiser. The benefits derived from these practices are now enjoyed by contractors and freelancers.

Offshore schemes and a majority of the offshore umbrella companies work through loans. Money that these have sent offshore is untaxed. Thus, earnings are not taxable unless brought back onshore. However, this money never returns onshore.

Offshore umbrella companies have money offshore. They will operate by loaning the money. Then this money will be taken back to pay back the loan. Loaned money is untaxable.

How Money Comes Back Onshore

The money sent off is different from the money that comes back onshore. It works through the contractor receiving loans. These loans are never paid back as these offshore umbrella companies obtain the money sent offshore in lieu of these loans.

This practice is completely legal as everything is framed in British law. HRMC has to change the law if it wants to stop it. Tory Grandees would eventually be hit if this happens.

Another great scheme

Offshore umbrella companies operate by investing a person’s money in a whole range of safe companies. Loans are sent in lieu of this money. Profits can be gained by quitting the scheme and capital gains tax is the only tax being paid.

The great news is that anyone can operate this through one’s own limited company. This company can help you with how you can do offshore schemes through your limited company.

Interested to know more? Visit

9 views0 comments
bottom of page