'Moving offshore' is a common tax planning strategy that you've probably seen mentioned in thrillers or seen in Hollywood films – but how applicable is it the average man in the street?

Well you'll be pleased to know that the UK offers some of the best offshore tax rules in Europe and is much more attractive than the United States. Under the UK rules once you establish yourself as 'non UK resident' for tax purposes your tax ties to the UK are pretty much severed. Of course there are still occasions when the UK taxman will look for his share of the 'tax take' but as a general rule these are pretty few and far between.

One of the best aspects of the UK tax system, unlike the many European countries (eg Spain and France) is that you can leave the UK and sell UK assets totally free of UK capital gains tax ('CGT'). This means that anyone owning property, investments or even a company can leave the UK and sell up without paying any UK tax. This is unusual as many countries take the view that as the gain has effectively arose over the period you've lived in the UK they want to retain taxing right. Not the UK though.

Of course if you were planning to do this there are a number of conditions you'd need to satisfy but if the tax at stake is significant they're usually not too onerous. The other issue of course with any form of offshore tax planning is finding out what the offshore tax position is overseas. The last thing you want is to 'jump put of the frying pan and into the fire'. This is a big risk for company owners who would usually be entitled to significant tax reliefs in the UK which could reduce their effective tax rate to just 10%. If they go overseas and don't look into it carefully they could end up paying more tax!

There are though a number of 'tax free' havens as well as 'low tax' havens that aren't even too far from the UK.

Countries such as Monaco and Andorra are effectively tax free for many UK expats.

In terms of low tax havens – take your pick as there are plenty! Examples include:

* Malta
* Isle of Man
* Channel Islands
* Cyprus
* Gibraltar

If you weren't bothered about going further afield you could also consider countries such as Dubai, Hong Kong, Singapore, Bahamas, Bermuda, Cayman Islands and the British Virgin Islands which can all eliminate or significantly reduce your taxes.

So what's involved in actually 'going offshore'?

Well, at it's simplest you could just sell up and live overseas…end of story! If you wanted to make a clean break with the UK this is basically what you'd do. Of course there are a few forms to fill in and you'd need to be careful as to when you sold assets but in tax terms it's actually very straightforward.

If like many expats you want to keep a 'foot in the door' in the UK, and still have UK links (such as a UK property, investments, close family etc) it's not quite as straightforward. There are time limits published by the Revenue that you'll need to observe for periods spent in the UK (generally less than 90 days on average over four years and not more than 183 days in any one tax year) but you'll also need to show that you've established a new home overseas and that there are few 'ongoing connections' with the UK. This isn't too difficult but will involve a bit more consideration of your position and UK assets/involvements.