| You've probably read in the newspapers of | | | | he would have otherwise had to pay if he'd |
| various celebrities and successful business | | | | extracted the dividends. |
| who manage to avoid or at least substantially | | | | |
| reduce their UK taxes - whilst a significant | | | | Using a tax efficient holding company |
| proportion of the general public are paying | | | | |
| close to 50% of their income in tax. Well, | | | | Famous bands such as U2 and the Rolling |
| there's nothing to prevent you using some of | | | | stones make use of some of the best offshore |
| these techniques to slash your UK taxes as | | | | companies to avoid paying tax on much of |
| well, depending on your circumstances. | | | | their income. U2 for example used to fall |
| | | | within the Irish tax regime which had a |
| Here's some of the techniques that the Rich | | | | longstanding tax exemption for artists. When |
| & famous use: | | | | this loophole was tightened up, they moved |
| | | | their holding company to the Netherlands to |
| Make the most of your offshore status. | | | | take advantage of tax free royalties. There |
| | | | are lots of other countries that can also |
| People like Mohammad al Fayed make tremendous | | | | offer tax efficient holding companies such as |
| use of their non UK domiciled status. If | | | | Spain, Denmark and Cyprus - and it can help |
| you're an overseas national and were born | | | | individuals too! |
| overseas (typically your father will also | | | | |
| have been a non UK domiciliary at the date of | | | | Using tax efficient trading companies. |
| your birth) you can avoid paying any tax on | | | | |
| your overseas income and capital gains. The | | | | Multinationals such as Coca Cola make good |
| main condition to this is that you need to | | | | use of a string of offshore companies to |
| keep the income or proceeds outside of the | | | | ensure that they can redistribute profits |
| UK. As you'd expect though there are ways | | | | within the group to reduce the overall |
| around this to enable some of the proceeds | | | | 'effective' rate of corporation tax. (It is |
| and income to be brought into the UK free of | | | | reducing this effective rate that is the main |
| taxes | | | | focus of many in house tax lawyers lives!) |
| | | | |
| Make the most of your spouses offshore status | | | | Actually move overseas |
| | | | |
| If you're lucky enough to have a husband or | | | | Celebrities such as James Blunt, Michael |
| wife that is either non UK resident or non UK | | | | Schumacher and Boris Becker have all moved |
| domiciled you can use their offshore status | | | | offshore to ensure they have only limited UK |
| to your advantage. This is what Philip Green | | | | tax obligations. They've based themselves in |
| did (the billionaire owner of BHS). His wife | | | | Switzerland and are local residents. The |
| is a resident of Monaco and he ensured that | | | | beauty of Switzerland is the 'fiscal deal' |
| she extracted dividends from his UK companies | | | | which allows the tax liability to be fixed at |
| free of UK (and overseas) tax. This saved him | | | | an artificially low amount. |
| paying UK tax of around £200Million that | | | | |