Am I legally allowed to offset the tax I pay on freelance work? (UK)
Yes, you can deduct from your taxable profits (almost) any expenses incurred in the course of your business. See here for HMRC's detailed advice on the subject. The fact that you have salaried PAYE employment as well makes no difference.
Being a CTO is different than freelancing, obviously.  You have to ask yourself what you would more prefer to do! My initial recommendation would be to receive your normal freelance compensation for the freelance work you do AND separately deal with the issue of being a CTO.  At some point you will cease to be this project's freelancer should you become its CTO. Then again, by becoming the CTO immediately you should be able to negotiate a larger share of the company. Granted, my opinions should not be considered legal or financial advice and you should consult a professional before making any decisions.  Ja ja ja  ;) I'd recommend you use an online tax calculator to see the effect it will have. To your comment with @littleadv, there's FMV, agreed, but there's also a rate below that. One that's a bit lower than FMV, but it's a discount for a tenant who will handle certain things on their own. I had an arm's length tenant, who was below FMV, I literally never met him. But, our agreement through a realtor, was that for any repairs, I was not required to arrange or meet repairmen. FMV is not a fixed number, but a bit of a range.  If this is your first rental, you need to be aware of the requirement to take depreciation. Simply put, you separate your cost into land and house. The house value gets depreciated by 1/27.5 (i.e. you divide the value by 27.5 and that's taken as depreciation each year. You may break even on cash flow, the rent paying the mortgage, property tax, etc, but the depreciation might still produce a loss. This isn't optional. It flows to your tax return, and is limited to $25K/yr. Further, if your adjusted gross income  is over $100K, the allowed loss is phased out over the next $50K of income. i.e. each $1000 of AGI reduces the allowed loss by $500. The losses you can't take are carried forward, until you use them to offset profit each year, or sell the property.  If you offer numbers, you'll get a more detailed answer, but this is the general overview. In general, if you are paying tax, you are doing well, running a profit even after depreciation. There are interpersonal relationships risks which you should consider. These are most likely to eventuate following a financial problem, and depend on your existing relationship.  In this answer I'm going to focus on the financial risks.  This is not financial advice, but my understanding as someone who has done this. This is best thought of as a loan from my parents to myself.  The main financial risks for my parents (the lenders): To avoid these risks, I need to ensure that I am sufficient ahead of loan repayments that I have the full amount of principal available to repay at any time.   Redraw Facility While some loans may allow for redraw, you should check the fine print of your loan agreement.  A redraw is like borrowing from the bank using existing collateral.  There could be some circumstances under which the bank does not allow redraw, even though you are ahead of loan repayments.  This might happen if house prices drop enough that you no longer have equity. Offset Account To avoid this problem, the loaned money is best put in an offset account.  An offset account reduces the interest on the loan.  Importantly, the money in the offset account is yours.  Withdrawal from the offset account does not represent a new borrowing but is a withdrawal from savings account.  Savings are government guaranteed to some figure. "Also within Germany the tax offices usually determine which tax office is responsible for you by asking where you were more than 180 days of the year (if e.g. you have a second flat where you work). That's a default value, though: in my experience you can ask to be handled by another tax office. E.g. I hand my tax declaration to my ""home"" tax office (where also my freelancing adress is), even though my day-job is 300 km away.  So if you work mostly from Poland and just visit the German customer a few times, you are fine anyways. Difficulties start if you move to Germany to do the work at your customer's place. I'm going to assume that this is the situation as otherwise I don't think the question would have come up.  Close by the link you provided is a kind of FAQ on this EU regulation About the question of permanent vs. temporary they say: The temporary nature of the service is assessed on a case-by-case basis.  Here's my German-Italian experience with this. Background: I had a work contract plus contracts for services and I moved for a while to Italy. Taxes and social insurance on the Italian contracts had to be paid to Italy. Including tax on the contract for services. Due to the German-Italian tax treaty, there is no double taxation. Same for Poland: this is part of EU contracts. By the way: The temporary time frame for Italy seemed to be 3 months, then I had to provide an Italian residence etc. and was registered in the Italian health care etc. system. Due to the German-Italian tax treaty, there is no double taxation. Same for Poland: this is part of EU contracts. Besides that, the German tax office nevertheless decided that my ""primary center of life"" stayed in Germany. So everything but the stuff related to the Italian contracts (which would probably have counted as normal work contracts in Germany, though they is no exact equivalent to those contract types) was handled by the German tax office. I think this is the relevant part for your question (or: argumentation with the German tax office) of temporary vs. permanent residence.  Here are some points they asked: There is one point you absolutely need to know about the German social insurance law: Scheinselbständigkeit (pretended self-employment). Scheinselbständigkeit means contracts that claim to be service contracts with a self-employed provider who is doing the work in a way that is typical for employees. This law closes a loophole so employer + employee cannot avoid paying income tax and social insurance fees (pension  contributions and unemployment insurance on both sides - health insurance would have to be paid in full by the self-employed instead of partially by the employer. Employer also avoids accident insurance, and several regulations from labour law are avoided as well). Legally, this is a form of black labour which means that the employer commits a criminal offense and is liable basically for all those fees.  There is a list of criteria that count towards Scheinselbständigkeit. Particularly relevant for you could be" As you're working, you and your spouse were probably born after 1935, so I'll assume that Marriage Allowance is relevant to you rather than Married Couple's Allowance. The allowance applies if your husband or wife earns less than the personal allowance in salary (£10,600/year), and less than £5,000/year in savings interest. For example it's likely this will apply if he or she's not working. Also, you need to be only a basic rate taxpayer, earning less than £42,385/year. In that case they can register online to transfer £1,060 of their personal allowance to you, which will reduce your tax bill by £212/year if you yourself earn more than £1,060 above the personal allowance. This will usually work by HMRC issuing a new tax code to your employer who will then automatically withhold less of your salary. You can't get your employer to do this directly, you have to go via HMRC. The allowance change will be effective as if from the start of the curren tax year in April 2015, so you will probably end up getting the proportion of the £212 that you could have had up till now (from April to August) back all at once in your next pay cheque, or possibly spread out over the rest of the tax year. Apart from that you'll get it spread out evenly over the year - i.e. about £17/month. I don't know enough about international tax law to dispute what you say, but I would think that if it were illegal we would be seeing more repurcussions for nearly EVERY multinational company using these practices. How can you prove that the licensing deal between bluehat9 llc and bluehat9 lp (cayman) is illegitimate? You normally wouldn't pay income taxes on money that isn't income. Transferring money or withdrawing it from a bank isn't an income generating event. I think it is very doubtful that you would need to claim that on income tax forms. It depends and I would not just jump into conclusion as I have seen cases where offering some services are not U.S. sourced income. I'll advise you speak with a knowledgeable tax professional.