Source: (consider it)
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Thread: Taxes and the rich - do whatever you can to not pay
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Eutychus
From the edge
# 3081
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Posted
quote: Originally posted by lilBuddha: If you'd not noticed, American rich are conspicuously absent. This is because the rich in America pay considerably lower taxes than other first-world nations. And the justification is entrenched in the culture.
As I understand it, it's also because US citizens have their own even less transparent and shell-company-friendly jurisdictions, such as Delaware. Why shop abroad?
-------------------- Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy
Posts: 17944 | From: 528491 | Registered: Jul 2002
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Uriel
Shipmate
# 2248
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Posted
The Panama papers reveal only part of the worldwide tax avoidance and evasion industry. Documents from one legal firm in one country. If similar leaks were made across law and accountancy firms in Delaware, Cayman Islands, Switzerland, Luxembourg, the Channel Islands, Gibraltar, Cyprus, etc. etc. a lot more would be brought to the surface, including American citizens ducking their responsibilities.
Posts: 687 | From: Somerset, UK | Registered: Jan 2002
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Doublethink.
Ship's Foolwise Unperson
# 1984
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Posted
I realise that this is almost certainly not as straight forward as it appears - but I feel rather well disposed to this guy http://www.bbc.co.uk/news/business-35984355
When was the last time you saw that happen ?
-------------------- All political thinking for years past has been vitiated in the same way. People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome. George Orwell
Posts: 19219 | From: Erehwon | Registered: Aug 2005
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no prophet's flag is set so...
![](http://forum.shipoffools.com/custom_avatars/15560.gif) Proceed to see sea
# 15560
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Posted
quote: Originally posted by Doublethink.: I realise that this is almost certainly not as straight forward as it appears - but I feel rather well disposed to this guy http://www.bbc.co.uk/news/business-35984355
When was the last time you saw that happen ?
November 2015.
-------------------- Out of this nettle, danger, we pluck this flower, safety. \_(ツ)_/
Posts: 11498 | From: Treaty 6 territory in the nonexistant Province of Buffalo, Canada ↄ⃝' | Registered: Mar 2010
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Doublethink.
Ship's Foolwise Unperson
# 1984
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Posted
It would be nice if we could reach some sort of critical mass.
-------------------- All political thinking for years past has been vitiated in the same way. People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome. George Orwell
Posts: 19219 | From: Erehwon | Registered: Aug 2005
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Doublethink.
Ship's Foolwise Unperson
# 1984
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Posted
quote: Originally posted by Doublethink.: I find the tenses of Cameron's statement rather suspicious. He is a millionaire, he was a millionaire *before* his father died - how exactly is a career politician going to become a millionaire prior to inheriting from his parents ?
The question is not so much did he benefit from his father's wealth and tax arrangements, but rather, at what point did he drastically simplify his financial arrangements and were they legit / ethical before he did so ?
And, moreover, what was he saying publically about tax at the time.
http://www.bbc.co.uk/news/uk-politics-35992167
Clearly, I am psychic. Now do we think the multimillionaire son of a stockbroker David Cameron had shares in only one off shore fund ? Stares into her crystal ball ... [ 07. April 2016, 19:59: Message edited by: Doublethink. ]
-------------------- All political thinking for years past has been vitiated in the same way. People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome. George Orwell
Posts: 19219 | From: Erehwon | Registered: Aug 2005
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TonyK
![](http://forum.shipoffools.com/custom_avatars/0035.gif) Host Emeritus
# 35
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Posted
What makes me really cross (and further diminishes my trust in politicians generally) is the way Cameron (please note I've dropped the honorific!) lets this information out drip by drip. Is he not astute enough to realise that it's all going to come out eventually and that this way he adds to the suspicion that he's hiding further disclosures.
And as for the promise that he will publish his tax returns - surely the point of offshore trusts and similar is that they don't appear in tax returns!!
Who I'm going to vote for next time is a real quandary - I wouldn't trust any of them to tell me the time of day unless they'd first stolen my watch.
-------------------- Yours aye ... TonyK
Posts: 2717 | From: Gloucestershire | Registered: May 2001
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Eutychus
From the edge
# 3081
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Posted
I agree it is terrible communication to reveal this now, but I'm not so sure it's actually evil.
£30k (the total amount redeemed) is a lot of money, but not an awful lot in wealth management terms; and the appropriate UK tax was paid on it when it became income. That doesn't sound like a scheme to dodge tax to me.
I also think there is a confusion being voluntarily maintained between "offshore" and "tax evasion". Not all the reasons for holding funds offshore are illegitimate, either legally or ethically. I wouldn't be surprised if many of shipmates' various savings schemes involved some offshore investments; that doesn't make us all tax dodgers.
-------------------- Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy
Posts: 17944 | From: 528491 | Registered: Jul 2002
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Eutychus
From the edge
# 3081
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Posted
Having said that and read this morning's internet, more than doubling your initial investment over 13 years is, to my mind, arresting. quote: Downing Street said Mr and Mrs Cameron bought their holding in April 1997 for £12,497 and sold it in January 2010 for £31,500.
-------------------- Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy
Posts: 17944 | From: 528491 | Registered: Jul 2002
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Curiosity killed ...
![](http://forum.shipoffools.com/custom_avatars/11770.jpg) Ship's Mug
# 11770
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Posted
It's terrible communication, not helped by his first statement making it entirely obvious, from the careful phrasing, that he had arranged his financial affairs so he could say he was clean, but left a lot of hanging questions about when and how he had achieved this.
It also leaves him open to suspicion about other offshore funds he may have benefited from. He's only put his hands up to this fund.
-------------------- Mugs - Keep the Ship afloat
Posts: 13794 | From: outiside the outer ring road | Registered: Aug 2006
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Beenster
Shipmate
# 242
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Posted
My bigger problem with this all - there is the morality of it which sucks.
But, these schemes are legal. And to me that's where the problem lies. We've had incident after incident where folk have been hammered for off-shore accounts - quite legit. There was one recently with pop stars - I can't remember who got nobbled.
Ethically, Mr. Cameron is wrong wrong wrong wrong wrong. Legally, I think it's a different matter (happy to be corrected).
Posts: 1885 | Registered: May 2001
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Alan Cresswell
![](http://ship-of-fools.com/UBB/Avatars/admin.gif) Mad Scientist 先生
# 31
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Posted
quote: Originally posted by Eutychus: Not all the reasons for holding funds offshore are illegitimate, either legally or ethically. I wouldn't be surprised if many of shipmates' various savings schemes involved some offshore investments; that doesn't make us all tax dodgers.
I have (to me) substantial funds in a Japanese bank and pension fund. This is because I work part time in Japan. I also have shares in a Spanish bank (having received shares in a British building society that demutualised, subsequently merging with said Spanish bank). Because I have overseas income I had to file a tax return for the first time this year, on which the overseas income was declared.
If I elect to hold some money in Japan after the end of my contract I won't need to declare the value of those savings - just the income I would get from those savings. Which is the same for my money in UK banks and investments, we don't declare the value of those, just the income on them.
-------------------- Don't cling to a mistake just because you spent a lot of time making it.
Posts: 32413 | From: East Kilbride (Scotland) or 福島 | Registered: May 2001
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Eutychus
From the edge
# 3081
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Posted
That's precisely the sort of thing I had in mind.
If we are doing our own Ship version of coming clean, I must confess I had current and deposit accounts in Jersey for several years. This was because it was the only way my historic UK bank would let me (as a non-UK resident) continue to hold a sterling account.
Coincidentally, by holding it in Jersey the UK tax deduction at source on the (puny) interest was not applied, quite legitimately since I pay tax in France, where I declared the interest.
I have now found a UK high street bank that is happy to hold my accounts in the UK. This makes me feel all righteous, except for the fact that the very same bank is one of the worst offenders in international money-laundering.
All of which is to say, Beenster, that the ethics of it all are complicated. Ensuring one's investments are wholly "ethical" is a nightmare in my view.
Back in my student days everyone was enjoined to boycott Barclays because of their investments in apartheid South Africa, but as I recall the only difference was that the other high street banks were investing there under other names.
I think the real damage in this story, apart from Cameron's squirming, is that it points up the huge disparities between the rich, in government, and the poor, with nothing at all to invest. [ 08. April 2016, 06:47: Message edited by: Eutychus ]
-------------------- Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy
Posts: 17944 | From: 528491 | Registered: Jul 2002
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chris stiles
Shipmate
# 12641
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Posted
quote: Originally posted by Eutychus: That's precisely the sort of thing I had in mind.
If we are doing our own Ship version of coming clean, I must confess I had current and deposit accounts in Jersey for several years. This was because it was the only way my historic UK bank would let me (as a non-UK resident) continue to hold a sterling account.
This kind of thing is true to an extent. There are reasons other than tax evasion for having offshore accounts or even other than tax avoidance. Historically there are other reasons as you suggest - primarily being an expat or because of currency controls. Most of these historic reasons have now disappeared.
Furthermore, from a tax point of view there is no difference between the various havens. There isn't anything you can do from HMRC/IRSs perspective in Panama that you couldn't do in Jersey/Bermuda/the Caymans etc (often a lot easier because of the historic ties these countries have with banks in various locales). The advantage of Panama is the ability to create structures with opaque ownership.
Posts: 4035 | From: Berkshire | Registered: May 2007
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Arethosemyfeet
Shipmate
# 17047
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Posted
quote: Originally posted by Eutychus: Having said that and read this morning's internet, more than doubling your initial investment over 13 years is, to my mind, arresting. quote: Downing Street said Mr and Mrs Cameron bought their holding in April 1997 for £12,497 and sold it in January 2010 for £31,500.
Even more suspicious in the eyes of many is how close the profit made is to the CGT threshold. It's almost as if the Camerons cashed out exactly the right amount of their stash to avoid paying tax. The usual buy-in was reportedly almost 4 times the reported purchase price which raises further questions. Had they, for example, been playing this same game in previous years? We're the rest of the shares simply transferred to other family members or trusted friends? Remember these are "bearer shares" with ownership record beyond who has them in their hand at a given moment.
Posts: 2933 | From: Hebrides | Registered: Apr 2012
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Eutychus
From the edge
# 3081
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Posted
quote: Originally posted by chris stiles: Furthermore, from a tax point of view there is no difference between the various havens. There isn't anything you can do from HMRC/IRSs perspective in Panama that you couldn't do in Jersey/Bermuda/the Caymans etc (often a lot easier because of the historic ties these countries have with banks in various locales).
I'm not sure that's true. It's often claimed by Channel Islands jurisdictions that they fulfil more internationally agreed anti-money-laundering criteria than the UK.
France, however, has in the wake of this just put Panama back on its blacklist of non-cooperative tax jurisdictions: the Channel Islands are not on that list.
-------------------- Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy
Posts: 17944 | From: 528491 | Registered: Jul 2002
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chris stiles
Shipmate
# 12641
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Posted
quote: Originally posted by Eutychus: quote: Originally posted by chris stiles: Furthermore, from a tax point of view there is no difference between the various havens. There isn't anything you can do from HMRC/IRSs perspective in Panama that you couldn't do in Jersey/Bermuda/the Caymans etc (often a lot easier because of the historic ties these countries have with banks in various locales).
I'm not sure that's true. It's often claimed by Channel Islands jurisdictions that they fulfil more internationally agreed anti-money-laundering criteria than the UK.
Even if this were true in the case of the Channel Islands, the fact remains that there are numerous jurisdictions that are easier to use than Panama. The main reason for using Panama remains one of privacy/opaque ownership.
Posts: 4035 | From: Berkshire | Registered: May 2007
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Uriel
Shipmate
# 2248
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Posted
More telling is Cameron's statement that he was proud of his father and his father's activities. When you are responsible for UK tax law you shouldn't be proud of people using tax havens, you should be clamping down on them. You certainly shouldn't (as Cameron did in 2013) step in to shield trusts from a clampdown on tax avoidance.
Posts: 687 | From: Somerset, UK | Registered: Jan 2002
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Oscar the Grouch
![](http://forum.shipoffools.com/custom_avatars/1916.jpg) Adopted Cascadian
# 1916
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Posted
quote: Originally posted by Uriel: More telling is Cameron's statement that he was proud of his father and his father's activities. When you are responsible for UK tax law you shouldn't be proud of people using tax havens, you should be clamping down on them. You certainly shouldn't (as Cameron did in 2013) step in to shield trusts from a clampdown on tax avoidance.
I'm surprised that no-one has really picked up on this. It's one thing to love your father and be proud to be his son. It's quite another thing to be proud of his achievements if said achievements consist mainly in running a tax avoidance scheme for the rich and powerful.
As it stands, Cameron's statement suggests that he sees nothing wrong in what his father was doing. Therefore, he can hardly be relied upon to take the lead in ending the kinds of schemes that his father was using (unless he is taking the rather despicable attitude of "we've made our money already, so screw the rest of you").
Either tax avoidance is morally wrong (as Cameron himself said about the likes of Jimmy Carr) and should be denounced as such regardless of who was doing it, or else you think it is a perfectly valid form of financial planning and you defend it as such.
Cameron's position at the moment is illogical in the extreme.
-------------------- Faradiu, dundeibáwa weyu lárigi weyu
Posts: 3871 | From: Gamma Quadrant, just to the left of Galifrey | Registered: Dec 2001
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Sioni Sais
Shipmate
# 5713
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Posted
I'm sure that our tax havens have been justified as a means of keeping funds in the British sphere of influence, rather than having them go elsewhere. Even if they do have economic benefits, they are very highly concentrated in the hands of very few people.
That's a lot less "fair" than the welfare reforms that Cameron's government has pushed through.
-------------------- "He isn't Doctor Who, he's The Doctor"
(Paul Sinha, BBC)
Posts: 24276 | From: Newport, Wales | Registered: Apr 2004
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Alan Cresswell
![](http://ship-of-fools.com/UBB/Avatars/admin.gif) Mad Scientist 先生
# 31
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Posted
quote: Originally posted by Eutychus: Coincidentally, by holding it in Jersey the UK tax deduction at source on the (puny) interest was not applied, quite legitimately since I pay tax in France, where I declared the interest.
And, if you were paying tax in the UK you would declare the interest to HMRC. I was required to file a tax return because I have non-UK income, and to declare that income. As I found when I mistakenly put that income in the wrong section, HMRC are quite willing to tax overseas income if tax had not already been paid on it.
Which raises the question. If someone has money in a "tax haven" where that income is not taxed then presumably they are required to declare that on their tax returns, and HMRC would tax it. So, for the tax haven to work either they do not need to declare it to HMRC (in which case, how come the rest of us have to declare overseas income?) or HMRC won't tax it (in which case, how come the HMRC will tax my income if it hadn't already been taxed?).
-------------------- Don't cling to a mistake just because you spent a lot of time making it.
Posts: 32413 | From: East Kilbride (Scotland) or 福島 | Registered: May 2001
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Eutychus
From the edge
# 3081
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Posted
In practice, I think domestic tax authorities becoming aware of offshore earnings usually depends on you declaring them. If they are suspicious, they can check with a cooperative jurisdiction, but they have to have probable cause first (they can't go on a fishing expedition). If your offshore revenue never ends up where you are tax domiciled, this idea can (in theory) be extended.
This is related to the concept of becoming a perpetual traveller and the "three/five flags" principle also mentioned in that article.
I am not recommending this idea; the person from whom I learned about it was in prison at the time... [ 08. April 2016, 21:27: Message edited by: Eutychus ]
-------------------- Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy
Posts: 17944 | From: 528491 | Registered: Jul 2002
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Alan Cresswell
![](http://ship-of-fools.com/UBB/Avatars/admin.gif) Mad Scientist 先生
# 31
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Posted
quote: Originally posted by Eutychus: In practice, I think domestic tax authorities becoming aware of offshore earnings usually depends on you declaring them. If they are suspicious, they can check with a cooperative jurisdiction, but they have to have probable cause first
Basically, tax authorities require people to be honest. And, by extension, people who fail to declare offshore income (or, for that matter UK income) are essentially being dishonest. And, if there is a legal requirement to declare all income accurately then not only is failing to do so dishonest, it's illegal. Which would make the statement that "it's legal" nonsense.
So, all the government needs to do is pass legislation that requires, by law, all UK residents with more than just PAYE income to file a tax return declaring all income as accurately and truthfully as possible. Failure to do so would be a criminal offense, it may be an offense that is difficult to detect, but it would make non-declaration of income a criminal offense.
-------------------- Don't cling to a mistake just because you spent a lot of time making it.
Posts: 32413 | From: East Kilbride (Scotland) or 福島 | Registered: May 2001
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Sioni Sais
Shipmate
# 5713
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Posted
From the government's own pages about income tax on foreign income.
Somewhere the relevant tax form from David and or Samantha Cameron ought to exist.
-------------------- "He isn't Doctor Who, he's The Doctor"
(Paul Sinha, BBC)
Posts: 24276 | From: Newport, Wales | Registered: Apr 2004
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ExclamationMark
Shipmate
# 14715
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Posted
quote: Originally posted by Sioni Sais: Somewhere the relevant tax form from David and or Samantha Cameron ought to exist.
The form wont exist but if you're lucky there might - just - be a record on computer file perhaps even a scan.
It's a very interesting exercise to ask HMRC for their copy of your file. It pretty much sends them into a panic: they will first try to argue that it is prohibited information (it isn't). Then they will fob you off with a computer print out - but there's also a paper file (Data Access covers all records). Then, they won't do it within the timescale set by the Data Access Regulations and you'll probably have to take up a case with the Information Commissioner - which you will always win. A pyrrhic victory as the IC will class it as a "technical breach" and do nothing - still its enough to annoy them and cost them more.
Finally you'll get your file which contains all sorts of things including HMRC staff's written opinion of you "Mr Mark is a very difficult and querulous man who questions everything and feels the need to know the last detail" (Too right sunshine, you want that too - it works both ways). Finally you'll have to battle to get the errors put right - data about address, workplace but also supposed records of phone conversations that never happened and which provably didn't (out of the country at the time).
You might be luckier than I in this process but at least you'll know what they have on you. Far far more than you think or ever dreamt possible. Always copy any correspondence to your MP.
My own policy is to keep records of absolutely everything as far as HMRC are concerned (even keep copies of cheques given for birthdays and Christmas). If the HMRC turn you over as they did me (out of revenge - the note was on file), they will tax you on all credits to any account. They are pretty shot to bits when you produce the hard copy evidence to disprove them. I bet Sammy and Cammy wont get that .... but perhaps a few movers and shakers ought to, to see what we ordinary people can go through over a few quid no multi millions.
Posts: 3845 | From: A new Jerusalem | Registered: Apr 2009
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Ricardus
Shipmate
# 8757
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Posted
quote: Originally posted by Eutychus: I'm not sure that's true. It's often claimed by Channel Islands jurisdictions that they fulfil more internationally agreed anti-money-laundering criteria than the UK.
France, however, has in the wake of this just put Panama back on its blacklist of non-cooperative tax jurisdictions: the Channel Islands are not on that list.
AIUI you can use tax havens for three separate things: firstly to hide income received from criminal enterprises, secondly to hide your income so that you're not taxed on it, and thirdly as a place for companies to funnel legitimately gained and openly acknowledged income so that they pay Luxembourgeois rather than British rates of corporation tax on it.
AIUI the Channel Islands let you do the third of these but not the other two.
-------------------- Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)
Posts: 7247 | From: Liverpool, UK | Registered: Nov 2004
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Curiosity killed ...
![](http://forum.shipoffools.com/custom_avatars/11770.jpg) Ship's Mug
# 11770
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Posted
Those Panama papers, according to the FT also confirm that buying property in London is a good way of achieving the first of your list Ricardus.
And the Government is trying to sell off the Land Registry at the moment. [ 09. April 2016, 08:45: Message edited by: Curiosity killed ... ]
-------------------- Mugs - Keep the Ship afloat
Posts: 13794 | From: outiside the outer ring road | Registered: Aug 2006
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Eutychus
From the edge
# 3081
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Posted
quote: Originally posted by Ricardus: AIUI the Channel Islands let you do the third of these but not the other two.
Yes, that's my understanding too, although they usually phrase it as "providing a major source of liquidity for international financial markets".
-------------------- Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy
Posts: 17944 | From: 528491 | Registered: Jul 2002
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rolyn
Shipmate
# 16840
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Posted
quote: Originally posted by Sioni Sais: Somewhere the relevant tax form from David and or Samantha Cameron ought to exist.
Or more precisely it ought to have existed. But whether or not, like the Conquerer's log , it still exists is a rather different prospect.
-------------------- Change is the only certainty of existence
Posts: 3206 | From: U.K. | Registered: Dec 2011
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Penny S
Shipmate
# 14768
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Posted
There was a sketch on the Now Show today on the idea that people should only benefit from services they have contributed to. The Fire Brigade turns up at some offices, ask which floor, spot that the firm is registered in the Caymans, and refer the owner to the phone number for that place's fire service. When informed that the floor above is catching, refer them to the Luxembourg service, commenting that at least it's closer. When informed that the top floor is catching, they get the hoses out, since that one is registered here, and say that the floors below will benefit from - you may be able to see this one coming as the punch line - the trickle down effect.
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Cod
Shipmate
# 2643
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Posted
I can't say I'm particularly excited by Cameron's promise to publish his tax returns. I have never had to fill out a UK tax return, but I imagine that if I had been the recipient of a tax-exempt distribution from an offshore trust that distribution would not have to be itemised in my return.
So it's not what's in them but what's not in them that would be of most interest to me.
Unfortunately, the income tax system is broken. It cannot be right that individuals can escape their responsiblities so easily. More seriously, it cannot be right for transnational companies ot be able to undercut local competition by resorting to tax avoidance mechanisms. Yet this is routinely accepted as a fact of life across the Western world.
Because of the rather ineffable nature of what income is, collecting tax on the basis of income requires a gigantic legislative code constantly in need of amendment even just to stop things from getting any worse. I feel that most countries face a choice - either abandon the principle of progressive taxation and rely on flat-rate consumption taxes like VAT or bring in a wealth tax - something I doubt I will see in my lifetime. [ 10. April 2016, 03:48: Message edited by: Cod ]
Posts: 4229 | From: New Zealand | Registered: Apr 2002
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Baptist Trainfan
Shipmate
# 15128
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Posted
quote: Originally posted by Cod: I have never had to fill out a UK tax return, but I imagine that if I had been the recipient of a tax-exempt distribution from an offshore trust that distribution would not have to be itemised in my return.
So it's not what's in them but what's not in them that would be of most interest to me.
Indeed. I also have a question: if one is super-rich, why does one feel the need to avoid/evade tax? Surely one has enough anyway to "get by"? And, in any case, doesn't it cost them a lot in payments to all those fancy financiers and accountants?
Having said that, I do think that there is a genuine difficulty in collecting taxes (or, rather, in working out where they should be paid) in today's globalised world. The problem is that IMO international companies and individuals are taking advantage of this.
Posts: 9750 | From: The other side of the Severn | Registered: Sep 2009
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Eutychus
From the edge
# 3081
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Posted
quote: Originally posted by Baptist Trainfan: if one is super-rich, why does one feel the need to avoid/evade tax? Surely one has enough anyway to "get by"?
I think this approach runs the danger of hypocrisy. The BBC papers page reports this comment: quote: "There is something very British" writes Anne McElvoy in the Observer, in papers "doing over Cameron because of offshore funds and yet also having avidly read 'money' sections"
'Tax planning' is something everybody does as soon as they have any money at all that can be taxed. Even if that is no more than shopping in a duty free zone or choosing a savings scheme with tax-free interest in preference to one that's taxed.
I don't think there's anything ethically wrong with this. The only alternative is to deliberately set out to pay as much tax as possible!
The real issue here is the disconnect between the amount of disposable income Cameron has, the amounts the majority have to get by on, and his perceived disregard for the latter.
-------------------- Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy
Posts: 17944 | From: 528491 | Registered: Jul 2002
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Chamois
Shipmate
# 16204
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Posted
Originally posted by Baptist Trainfan:
quote: I also have a question: if one is super-rich, why does one feel the need to avoid/evade tax? Surely one has enough anyway to "get by"? And, in any case, doesn't it cost them a lot in payments to all those fancy financiers and accountants?
In our western capitalist culture nobody ever has enough, by definition.. The economists measure the "health" of our national economies in terms of growth. Growth requires inflation. Inflation requires an ever increasing income to maintain the same standard of living. The days are gone when people could live comfortably and face the future with confidence on a fixed income. That's what they tell us. So we all need more, More, MORE. And if we don't need it, our children do. And if our friends, colleagues, neighbours and media celebrities are getting more, More, MORE - well, we've got to keep up, haven't we?
In the face of this disease a person has to be seriously counter-cultural to accept all the risks that are trumpeted daily in the media and trust that they have enough.
In the case of the super-rich, making more money is often the whole purpose and aim of their lives. So they will be in the forefront of the more, More, MORE madness. Their financiers and accountants are no doubt a tax-deductible expense.
-------------------- The steadfast love of the Lord never ceases
Posts: 978 | From: Hill of roses | Registered: Feb 2011
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Baptist Trainfan
Shipmate
# 15128
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Posted
quote: Originally posted by Eutychus: The real issue here is the disconnect between the amount of disposable income Cameron has, the amounts the majority have to get by on, and his perceived disregard for the latter.
No, the real issue is surely the fact that Cameron wriggled and squirmed when asked. Everyone knows he's a rich man and expects him to have investments ... so why risk credulity, especially at such a crucial time in his political career?
Posts: 9750 | From: The other side of the Severn | Registered: Sep 2009
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Baptist Trainfan
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# 15128
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Posted
quote: I think this approach runs the danger of hypocrisy. The BBC papers page reports this comment: quote: "There is something very British" writes Anne McElvoy in the Observer, in papers "doing over Cameron because of offshore funds and yet also having avidly read 'money' sections"
'Tax planning' is something everybody does as soon as they have any money at all that can be taxed. Even if that is no more than shopping in a duty free zone or choosing a savings scheme with tax-free interest in preference to one that's taxed.
There's truth in that (says I, just having made sure that I've made use of this tax year's ISA allowance). [ 10. April 2016, 08:12: Message edited by: Baptist Trainfan ]
Posts: 9750 | From: The other side of the Severn | Registered: Sep 2009
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mr cheesy
Shipmate
# 3330
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Posted
It seems to me that there are two intertwined issues here which are being confused.
The first is a moral issue. The Tories like to suggest that it is perfectly moral for the individual to find ways to avoid paying tax.
The second is practical. The tax code system is extremely complicated and bizarrely subjective. And the British (and presumably other) governments have set in place systems which nudge use particular public inclinations to lead to "desirable" outcomes.
Hence we have the whole tax-free savings system - which sounds great but in an environment of low interest rates almost never offer competitive rates. Also the recent lifetime ISA announcement, which - arguably - are being offered as long-term savings to the middle-classes in order to reduce/remove the provision of state pensions in 30 or 40 years time.
These kinds of state nudges (including the gift aid system in the UK) are pretty small beer.
On the sliding scale of the morality of paying tax, the next step seems to me to be the widespread underpayment of National Insurance by individuals who have incorporated their self-employed status, the avoidance of inheritance taxation, the general attitude that assets should be hidden - or conveniently lost - when it comes to paying for old-age care and other such wheezes.
Many of these things seem to me to be morally objectionable. But in another sense they're at least done "in public", under the full gaze of British law, by arrangement to the laws of the land and by design of the law-makers for other ends.
Then we have the whole phenomena of the wealthiest using hidden, black, impenetrable overseas jurisdictions to avoid paying tax in this country. That seems to me to be morally bankrupt on a whole other level. That just smacks of someone who wants to take-take-take from the public purse in this country while contributing the least possible. Because they're very wealthy they have access to accounts, systems and expertise that the poorest do not have access to (and probably would make very little difference to their own tax bill even if they did, due to the economies of scale).
That, ultimately, is the problem here. Egged on by the Tory mantra, we have a whole section of society who thinks that they're just too important to pay the tax that the "little people" have to pay, that they're too important to have to declare their earnings, that they're too moral to have others ask questions about how and who is managing their wealth.
And the greatest tragedy is that these are the very same people who are lecturing everyone else about cuts in public services, about the best way to arrange education and healthcare systems that they don't even use and who like to divide everyone else into the deserving hard-working, tax-paying class and the undeserving, shirking, benefit-takers. The reality is that these hypocrites would rather shine the light on those they deem to be shirkers - and in the process spend more on investigation and collection of fairly minor amounts of benefit fraud - than do anything about the vast amounts of money that are dodged by the wealthiest individuals and corporations in this country.
-------------------- arse
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Barnabas62
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# 9110
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Posted
Maybe someone has said this earlier and I missed it, but there is both a legal and a moral difference between tax evasion (evading tax by illegal means) and tax avoidance (avoiding tax by legal means).
Pension fund managers routinely use legal tax avoidance measures to safeguard retirement incomes for their customers. You might well argue that they would be lousy pension fund managers if they didn't.
The devil is in the detail of the now very complex tax regulations we have in the UK. When does legitimate tax avoidance shade into illegitimate tax evasion? My brother used to work for the Revenue. He says the answer to that question is a moving target, depending very often on legal arguments over the real meaning of the tax legislation and its application in specific cases. Case law and precedent can change things, as can modification to existing regulations.
What we now have is a moral and legal morass, now complicated further by the political "does that smell right?" considerations. The politics of arrogance meets the politics of envy around the heads of posh boys. [ 12. April 2016, 12:59: Message edited by: Barnabas62 ]
-------------------- Who is it that you seek? How then shall we live? How shall we sing the Lord's song in a strange land?
Posts: 21397 | From: Norfolk UK | Registered: Feb 2005
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Baptist Trainfan
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# 15128
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Posted
quote: Originally posted by mr cheesy: It seems to me that there are two intertwined issues here which are being confused.
...
And the greatest tragedy is that these are the very same people who are lecturing everyone else about cuts in public services, about the best way to arrange education and healthcare systems that they don't even use and who like to divide everyone else into the deserving hard-working, tax-paying class and the undeserving, shirking, benefit-takers. The reality is that these hypocrites would rather shine the light on those they deem to be shirkers - and in the process spend more on investigation and collection of fairly minor amounts of benefit fraud - than do anything about the vast amounts of money that are dodged by the wealthiest individuals and corporations in this country.
(Quote shortened only to save space). [ 10. April 2016, 10:15: Message edited by: Baptist Trainfan ]
Posts: 9750 | From: The other side of the Severn | Registered: Sep 2009
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Enoch
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# 14322
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Posted
quote: Originally posted by Eutychus: 'Tax planning' is something everybody does as soon as they have any money at all that can be taxed. Even if that is no more than shopping in a duty free zone or choosing a savings scheme with tax-free interest in preference to one that's taxed.
I don't think there's anything ethically wrong with this. The only alternative is to deliberately set out to pay as much tax as possible! ...
Fair comment. That gets a
And the state could only plead that you should pay as much tax as possible if in return it set out to provide you with as many benefits as possible. And I don't see that ever happening.
-------------------- Brexit wrexit - Sir Graham Watson
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mr cheesy
Shipmate
# 3330
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Posted
quote: Originally posted by Enoch: Fair comment. That gets a
And the state could only plead that you should pay as much tax as possible if in return it set out to provide you with as many benefits as possible. And I don't see that ever happening.
That's utterly the wrong way to think - and ultimately is the cause of the current problems. If everyone thought that their (individual) benefits should meet (or even exceed) the net contributions they (individually) contribute, then that obviously wouldn't work.
This thing we live in is called a society. It isn't just about you and me as individuals funding the little pieces we think we might benefit from now or in the future.
-------------------- arse
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Ricardus
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# 8757
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Posted
quote: Originally posted by Cod:
Because of the rather ineffable nature of what income is, collecting tax on the basis of income requires a gigantic legislative code constantly in need of amendment even just to stop things from getting any worse. I feel that most countries face a choice - either abandon the principle of progressive taxation and rely on flat-rate consumption taxes like VAT or bring in a wealth tax - something I doubt I will see in my lifetime.
I think there is also an argument for abolishing corporation tax altogether and raise personal tax on investment income to compensate. The reasons being:
a.) Insofar as a corporation is fundamentally a 'front' for a group of investors, the same profit is being taxed twice at the point at which it benefits someone;
b.) Investment income on a share reflects the movement in market value of a share, which assuming market efficiency should be a better indicator of the company's real performance than profit, which can be manipulated;
c.) It's relatively easy for a company to obfuscate profit, but the amount of money anyone makes on an investment should be (at least by comparison) a relatively objective fact.
-------------------- Then the dog ran before, and coming as if he had brought the news, shewed his joy by his fawning and wagging his tail. -- Tobit 11:9 (Douai-Rheims)
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Anselmina
Ship's barmaid
# 3032
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Posted
When I think of my mother having to pay tax on the pension she receives as my father's widow, I find it sickening to think of how some rich people can so easily avoid tax contributions. It seems that out of the little enough she receives, she's still ensuring - in her late seventies - there's an NHS, benefits etc for the country, while fat cats rake it in, store it away, and give back as little as possible for those truly in need.
-------------------- Irish dogs needing homes! http://www.dogactionwelfaregroup.ie/ Greyhounds and Lurchers are shipped over to England for rehoming too!
Posts: 10002 | From: Scotland the Brave | Registered: Jul 2002
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Alan Cresswell
![](http://ship-of-fools.com/UBB/Avatars/admin.gif) Mad Scientist 先生
# 31
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Posted
Taxation is both a revenue source for governments and a means of enacting government policy. So, if you want to encourage charitable giving, governments make that favourable through some form of tax relief (either the UK Gift Aid type scheme, or through tax rebates to the donor). Encourage saving, introduce tax free savings accounts (which only work when interest rates are high enough to make tax a factor in the returns on a savings account). Discourage smoking, increase tax on tobacco. Of course, one can question whether a particular policy is desirable and whether using the tax system is the most effective way of achieving that policy.
For a long time, turning a blind eye to income in low tax nations has also served government policy - it has kept the rich content, and donating to political parties.
-------------------- Don't cling to a mistake just because you spent a lot of time making it.
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rolyn
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# 16840
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Posted
I think this is a storm in a teacup where Mr C is concerned and also agree about a certain degree of hypocrisy from many a shrewd manager. Wherever there is a pot of money tendrils will find their way in to it, just as wherever there's an effective hidding hole then money will find it's way in to that as well. Didn't it used to be Swiss bank accounts?
-------------------- Change is the only certainty of existence
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quetzalcoatl
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# 16740
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Posted
I think normally it would be a storm in a tea-cup. After all, it's not a shock that the rich find ways to keep their dosh unravaged by the moths and termites, known as the tax-man. Well, so do local tradesmen actually, cash only guv.
But it is intersecting in an interesting way with the EU referendum. Cameron is presumably the leading man in the pro-EU-pantomime, and any tarnishing of his image may impinge.
I suppose you could argue that salivating anti-EU nutters are not going to vote even more anti-EU. Will it affect the don't knows? Don't know.
-------------------- I can't talk to you today; I talked to two people yesterday.
Posts: 9878 | From: UK | Registered: Oct 2011
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Eutychus
From the edge
# 3081
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Posted
quote: Originally posted by quetzalcoatl: But it is intersecting in an interesting way with the EU referendum. Cameron is presumably the leading man in the pro-EU-pantomime, and any tarnishing of his image may impinge
That was certainly one of my fears, but then I discovered that Leave campaigner Boris Johnson has suggested that the super-rich are a put-upon minority, which kind of evens things out, perhaps...
-------------------- Let's remember that we are to build the Kingdom of God, not drive people away - pastor Frank Pomeroy
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rolyn
Shipmate
# 16840
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Posted
quote: Originally posted by quetzalcoatl: But it is intersecting in an interesting way with the EU referendum. Cameron is presumably the leading man in the pro-EU-pantomime, and any tarnishing of his image may impinge.
The dirt-diggers are no doubt exceedingly pleased with themselves over this juicy Find . It to be said though that until Brexit start to look more like a Movement and less like a breakfast cereal brand name then I don't think Cameron has much to worry about on that score.
-------------------- Change is the only certainty of existence
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