BioMed Realty - Expats and Corporate Tax
BioMed Realty co-founders Alan Gold and Gary Kreitzer created the business of developing and managing real estate specifically for the life science industry. They recognized that the life science industry and universities have unique and special requirements for real estate that commercial real estate companies were not providing. Today, their business has grown and evolved into one of the leading providers of real estate and real estate services to the life science and university communities. BioMed Realty was founded in 2004 and is headquartered in San Diego, CA.
In 2012, BioMed Realty acquired Granta Park, a state-of-the-art life science campus in Cambridge, UK. The company wanted to relocate a trusted US-based employee on a long-term assignment to the UK to facilitate the transition of Granta Park from its previous owners. BioMed Realty needed assistance sending employees abroad and looked to Radius to provide authoritative information and advice to lower costs and risks associated with the assignment.
Expat assignments are challenging, even those involving just a single employee. BioMed Realty needed to comply with all applicable home- and host-country immigration, corporate tax, social security and employee-benefits obligations. The company also wanted to ensure that its valued employee didn’t suffer personal tax losses as a result of the assignment.
Radius offers international corporate tax structuring advice for US companies. In order to preserve Biomed Realty’s desired corporate tax structure, the company needed Radius to align its own advice — and the implementation of any UK payroll for the expatriate — with the advice of an accounting firm.
Radius worked in lockstep with both BioMed Realty’s leaders and its accounting firm to understand the company’s short- and long-term plans in the UK, the full extent of the expat assignment (including the nature of the role, existing salary and benefits, and dates of stay) and BioMed Realty’s corporate tax structure.
Radius then helped BioMed Realty develop and implement a tax equalization policy that reflected its policies and objectives. The policy ensured that BioMed Realty’s expat (and any future employees the company sent abroad) would fulfill any income and social security obligations across jurisdictions without suffering tax losses.
Radius initially implemented a UK payroll for the expat employee and prepared his US and UK tax returns. In 2016, the basis of the assignment changed and the expat began to spend a substantial amount of time working in the US. To accommodate payroll tax requirements in both the US and the UK, Radius designed a dual payroll arrangement. Radius then applied for a UK tax exemption to reduce withholding requirements, and also adjusted the employee’s tax equalization amounts — including hypothetical tax withholdings — in accordance with BioMed Realty’s tax equalization program.
Starting in 2016, Radius is assisting BioMed Realty with local payroll services, employment contracts and policies, and other HR matters for local UK employees.