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Safe Offshore Tax Havens PDF Print E-mail
Friday, 05 December 2008 15:38

Safe Offshore Tax Havens

Tax is one of the most frightening issues many international investors will ever face. Investment International offers some straightforward pointers

Planning tax affairs effectively is one of the toughest tasks any international investor will face. If you make a mess of your tax strategy you could face an enormous tax bill and run the risk of being known as a criminal by your friends. Get it right though, and in many cases you will - legally - significantly minimise you and your family’s tax exposure.

Lazy tax planning (or no tax planning) could cost a small fortune. For example, if you don’t cash in your assets before you return to your country of origin, then you could face a large capital gains tax bill.

Safe Offshore Tax Havens - Tax Planning

Unfortunately, tax planning, as you will appreciate, is too complex an issue to cover in any depth in one short article. There are, however, some straightforward issues international investors should be aware of when considering tax affairs.

If there were one simple piece of advice expatriates should consider when attempting to minimise their tax liability it would be this: understand your domicile. Your domicile is important because it is a key factor in where your tax liabilities fall.

Safe Offshore Tax Havens & Jonathan Crowther

Jonathan Crowther, a tax expert at Abbey National Treasury International, says: “Virtually everyone I’ve ever met doesn’t understand their domicile situation properly. Either they don’t know their domicile, or they have got it completely wrong.”

For example, in one case, one of Crowther’s clients planned to return to
the UK in the future while his son attended a UK school. He had planned not to tell the UK tax authorities about this, fearing it might change his domicile and expose him to UK taxes. But Crowther encouraged his client to be honest. The client found that in his particular case, he was not going to be UK domiciled and would therefore not be liable for UK taxes. It meant he also had greater peace of mind.

If you plan properly you could, circumstances permitting, avoid income tax, inheritence tax, capital gains tax. It is also vitally important for investors to plan their tax affairs before - not after - moving country.

Safe Offshore Tax Havens & David Franks

David Franks, managing director of financial advisers and accountants Blevins Franks, says: “Once you have become a tax resident of a new country, it can be much more difficult to reorganise your affairs properly.”
For example, if you have not pre-planned you may inadvertently change your country of residence or country of domicile and not be able to change it back again.

 

For more relevant news items and magazine articles please click the links below:

News: Jersey & Guernsey Remain Off Tax Haven Blacklist

Article: Weapons of Tax Destruction

News: The Pressure is Mounting On Offshore Jurisdictions

 

   

 

 

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