I run a UK Ltd generating millions of dollars a year in sales to the US. We are losing money from currency losses and have issues paying state sales tax in the US. It seems like a good idea to open a US LLC and move all assets to the US LLC instead of continue running under a UK Ltd. Is it legal to simply open a US LLC and move all activity and assets to this new entity? It seems like it shouldn't be so simple?
You have a couple of choices and you need to get tax and legal advice before moving forward.
The UK company could establish a subsidiary in the US. Profits earned there would flow up to the UK parent after local taxes etc. Assets transfered may create liabilities, talk to CPA.
The other way is for you to create a US entity and use it to buy the assets of your UK corp. There are rules around the pricing of the assets, then you'd have to decide how to wind up or deal with the money in the UK corp, again, talk to CPA.
Basically, the value (if any) in the UK entity will likely trigger some tax consequences in the UK. So, no, it's not as easy as just 'moving it over' unless there really is not much of any value.
Hope that helps.
Answered 6 months ago