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