Offshore & Tax

[azdo]

I'm looking for clarity re people who setup funds in Caymans/BVI etc, for tax purposes.

Even if someone registers a fund/company offshore, aren't they taxed wherever the fund is controlled, i.e. where the fund manager is placing trades - be it on US/British/other soil?

I'd be grateful if someone could help shed some light on this...

 

[stochastic]

Some of these jurisdiction do not tax you on the earned income. For example, a Panama entity won´t be taxed if the income is made or received outside Panama.
The manager can be anywhere, but if the receiving bank account is outside Panama, no taxes in Panama.

Panama Brokerage, Offshore Forex Accounts

 

[BSD]

I as a foreigner could go live in the UK as a non-domiciled resident and not have to pay taxes on my foreign sourced income.

I would ONLY be taxed on the money I "import" for living purposes, eg rent etc.

Think there was some plan to introduce a flat tax of 30K / year on non-doms instead but have no idea what became of that.

BBC NEWS | Business | Treasury 'climb-down' on non-doms

But for the purpose of this thread and provided that the starter is a Brit then that will not be applicable for Brits living in and trading out of Britain.

The whole non-dom thing was basically a clever idea to get high net worth individuals to move to the UK, and while they wouldn't be spending a lot of money on taxes there they would still be spending a lot otherwise, making the whole thing worthwhile bottom line.

If I want to go low tax / no tax I need to leave Germany and move abroad, I won't be able to own or even rent anything here, I have to be totally based abroad in eg London or in Switzerland that has a similar arrangment, or go live in Monaco etc.

Or US citizens always need to pay taxes, ie even if they move to no-tax Monaco they still need to pay US taxes, but if they move to another country with "normal" taxes that is signatory to a double taxation agreement with the US they won't have to pay taxes twice.

 

[Adamus]

Markus, couldn't your wife or child own a residence in Germany where you can visit? Or is it simply that you would not be able to register as a resident, and that makes it impossible to buy or rent somewhere?

 

[N Rothschild]

move to the bahamas

 

[BSD]

Hi Ahardy, right, to live here either through renting or owning you need to be registered, but then you need to pay taxes.

Boris Becker sold all he had here and wasn't renting anything and moved to and registered in Monaco.

Now despite their having a rule that people actually need to live there half a year or get kicked out it turns out that he was actually spending a good part of the year in Munich, understandably imo as Monaco is very nice, but a bit too small and hence boring for year round living haha, anyway in Munich he was living in a flat there that was rented or owned I forget but in his sisters name.

Problem was that some paparazzi had taken enough pictures of him arriving and leaving there with sufficent regularity to get the tax people going after him.

He was really lucky that he only had to pay a hefty money fine on top of back taxes and not do some time behind Swedish curtains which was probably also down to the fact that he cooperated with the authorities from the very outset, and admitted the allegations.

Now he got into problems only because he let himself get caught obviously living here when he said he wasn't.

But basically I can move abroad and if I don't own or rent anything here thats fine even if my brother etc lives here still, but with direct family which here would only apply to a spouse as far as I am aware that wouldn't work.

Not sure but think children would be OK again, ie I am abroad and they are here, yet I pay no taxes here.

I think it's ok to pay taxes - as of 2009 capital gains here will be a flat 25% - but I also think it's fine to do what all big companies do, exploit all legal options to minimize your taxes, by eg moving yourself as an individual or the majority of your income as a firm to a low tax country etc.

 

[*JDR*]

Azdo,
Yes if an offshore company is directly controlled in the UK the company is subject to UK corp tax.

You can do a few things to make sure this is not the case.

Seek Advice.

 

[stochastic]

"move to the bahamas" All the Caribbean countries now are following EU directives. Meaning, snitching

 

[Adamus]

If only slippage was as easy to deal with as tax!

Poor old Boris. I wonder where he's based now. He's been all over Sky TV in some new online poker adverts.

And what did Steffi Graf do wrong then? Wasn't her dad caught driving to Liechtenstein with a suitcase full of cash?

 

[BSD]

Oh, now he's back officially in Germany, but constantly travelling apparently, his ex is in Florida with the kids, his English Ex is in London, he's just broken up with his latest girl, so on the market again having a good time I suppose.



Yeah, Steffis dad who was her manager at the time also didin't think too much about paying taxes even though both were registered in Germany.



That's what happens when you listen to tax "advisors" who wouldn't be qualified to cook the books of your local bakery but advertise constantly in the likes of TIME magazine about how easily anybody can stop paying taxes if they just listen to their advice, haha.



If you want a tax solution go to a big international tax and accounting firm, and simply accept that there is NO way for you LEGALLY to not pay taxes in your OWN country if you live and work from there, no matter what these charlatans promise, it will NOT be legal.

 

[Adamus]

I agree and always like to play by the rules. I ceased to get a kick out of breaking them a long time ago. Financial gain is not enough of a compensation for the paranoia and constant looking over your shoulder for the taxman. At least the system with all its inadequacies still works more or less in our favour (speaking as a middle class European).

 

[BSD]

Adam, quite agree, I mean for me the biggest deterrent would be having to go stand in front of some judge who could send me to prison, there is no way I would want to give anybody that power over me.

Heck, if you don't want to pay taxes and are not a US citizen who always have to pay em then just go and live abroad, besides, there is very little if anything that is quite as entertaining, at home everything is known and nothing surprises you, other countries are full of new experiences and fun.

Everybody should do that at some point and the world would have less problems.

Properly live abroad, not just go visit for some weeks that is.

 

[Adamus]

I lived for about 6 months in Nigeria, that was amazing. There are actually huge numbers of ex-patriates in Nigeria, and while some of them are interesting, some of them build up their own little version of England (or Germany I guess) to live in with their other ex-pat friends - and you find the really interesting stuff once you leave their company.

I didn't pay any tax to anyone that year - although I guess I wasn't earning much.

 

[BSD]

Nigeria eh, now that is one of the toughest / most dangerous places you can be in.

Well put with the expats "Lil" England / Germany etc thing, that is definitely true.

I grew up as a Third Culture Kid and amongst others spent some time in Khartoum / Sudan, that was still under General Numeriri's rule when things were lots better there than they are today - religion messes things up more than pretty much anything else I can think of offhand - and that was one huge adventure to me as a kid who was there from kindergarten through 2nd class, an absolutely amazing time where amongst others there was this terrifically active social life with events pretty much every evening where we kids were usually taken along, my father only having had to work half the day lol because of there really not having been all that much to do, him having let me drive our car in the desert, just incredible fun all of it !

We always had German schools afterwards in other postings, but there we didn't, and for some reason my brother went to the English school, while I went to the American one.

Funny how the different accents developed haha.

 

[BSD]

Seems relevant:

Offshore tax havens: crackdown - Accountancy Age

Adam said it well: always looking over your shoulder, wondering when they'll catch you...

Most people btw apparently get reported by neighbours, friends and relatives, lol.

 

[HongKongBlue]

Some advice needed!

Quick question for the experts, my wife is a UK resident but Taiwan citizen (non dom), can she trade in forex and not be subject to UK capital gains? It's a very grey area, I did seek some advice from a tax expert with regards to shares held abroad and cashed in abroad and, I have been told that this would not be subject to UK tax. Just wondering if it's the same for currency trading? Also, what actually constitutes a currency trade? Is it decided by how many times you swap currency within a given time period?