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