The offshore crusade has started…
Thursday, 5 February 2009
Whilst the taxmen from the members Organisation for Economic Co-operation and Development (OECD) will focus their attention on the rich, it is the ripple effect that will impact on those offshore investors trying to avoid tax.
In our previous blog about offshore investment, we explained that momentum is building, not least from the White House in the US.
The credit crisis has led to high levels of debt. This has to be repaid through increased tax revenue. Yet the current recession means tax revenues are likely to fall. It’s a big hole and someone has to pay.
According the BBC Panaorma, the UK taxpayer is losing £18.5bn in lost revenues from tax havens. It is therefore understandable why the tax havens will be under pressure.
Take a look at the BBC Panorma iplayer and make your own mind up.
Whilst it is fair no one should overpay tax, in fact, it is fair that every effort is made to minimise the liability, but as the crusading members from OECD build momentum to seize tax revenues, many investors maybe caught with possible legislation.Whilst some investors may do nothing until events force them into action,yet by default it is on death that all their plans may unfold. It is therefore worthwhile asking questions now.
If you are an offshore investor ask yourself this question, with the increase in activity on the tax havens, with the uncertainty created by the credit crisis and the often opaqueness of how your capital is invested, would you make the same decision today as you have in the past to invest offshore? If the answer is yes, there is no need to take any immediate action. But if you have any doubt, it is time is to ask questions about your money.
Here are some questions to help?
• If you withdraw the capital today, what will be your tax liability?
• If you withdraw capital today, what has been the return on your capital? How does that compare to alternatives?
• If you stay invested offshore, when is the right time to withdraw income or the capital?
• Do you have to become non resident to gain full tax benefits? If so, what are the practicalities of becoming non resident?
• What happens when you die? What is the tax liability? How will your beneficiaries obtain access to the funds?
• What happens if you are ill? Do the offshore providers accept UK law regarding powers of attorney?
• If you have instructed offshore trustees, have you met them? Are you clear about their powers?
• Finally, revisit the reasons why you invested capital offshore and establish if you have alternatives. If you are doing the best you can do, staying offshore maybe your best option.
Of course the taxman is not that bad…or is he?.ask The Beatles.
If you get a hat hat, I'll tax your hat
If you get a cat cat, I'll tax your cat
If you wipe your feet feet, I'll tax your mat
If you walk away away, I'll tax your [..]
Now my advise to those who die
(taxman!)
Declare the pennies on your eyes
(taxman!)
cause I'm the taxman
Yeah, I'm the taxman.
And you're working for no one, but me
(taxman!)
posted by Murray Round Wealth Management @ 16:46,
The Authors
Nicholas Round
Nic is the Managing Director of Murray Round Wealth Management Limited, who seeks to ensure the advice provided is truly independent. Based in Shropshire with clients local, national and worldwide, Nic has strived to find the best possible service for his clients needs, by researching and studying the market, trends and philosophies. Nic strongly believes Asset Class Management will bring his clients Financial Freedom, Independence and Happiness.
Kirsty
Kirsty is our communication guru. Managing information requires considerable due diligence and her passion for organisation gives the clarity we all seek. From Shropshire, with a Psychology Degree and much travelling, she is now back in Shrewsbury...and London often, keeping us all at Murray Round focused.
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