[Closed] Paradise Papers

If you are going to set up a globally focused business / asset management platform you do so in a tax efficient jurisdiction which can include so called “tax havens” (Luxembourg and Ireland qualify too). You do this as tax rates vary so widely accross the world and an investor in say Singapore where tax on interest and capital gains are ZERO it makes no sense for it to be put in a high tax location. Tax is paid when the money is repatriated to the country of residence. This is just the same as a pension where tax is paid when pension is drawn.

@Jekyl any investor the Queen included will pay tax when any income / profits are taken. The Queen voluntarily offered to pay tax some years ago, previously she did not have to. EU employees inc those at EIB in London pay something like a 10% tax rate

@jekyl as I tried to explain above they invest “offshore”as thats where the products are setup as they target a global client base

no.

"I fancy buying the off-license on the (UK) High Street".
"Excellent idea. Cash or cheque?"
"Cheque, but first I'll post the cheque to the Cayman Islands so that the little people can't se what I'm doing."
"Wonderful. I hear it's lovely this time of year."
"I wouldn't know, but my cash has a nice sun-tan."

ok, got that. So why is that a problem? And why should I be offended by the fact I am a little person who didn't get to observe the transaction any more than I don't get to observe, say, yours?

The question then remains, if the duchy is not legally liable for any tax why invest offshore? better interest rates? or what....?

It is how the Collectve Investment Scheme that invested some of her money is set up. The vast majority of Private Equity Funds are set up like this, so if you want to invest in the asset class, you are going to be doing it through an offshore fund. Why are they set up like this? It is the simplest and cheapest way of ensuring the "fund wrapper" doesn't create additional tax charges for a wide variety of potential investors. It is probably worth pointing out that the vehicles involved were LLPs. These are transparent entities for UK tax purposes so the Investor is regarded as entering into the transactions entered into by them directly, in proportion to their share of the income.

The term 'Tax Haven', is immediately suggestive of tax avoidance.
And historically huge sums have been avoided in them. Surely its right to be suspicious of this if there are onshore options that the Queen could invest in without damaging her reputation.

The term transparent also makes little sense , since we only learned of her Maj using offshore banking to invest in a company that charges the hardest up 70% APR to buy a telly, sofa or washing machine, have only come to light thanks to this leak, even the Queen herself apparently unaware.

Also have Tory & Brexit donor Ashcroft who had apparently renounced non-dom status, this leak shows he hasn't

And historically huge sums have been avoided, surely is right to be suspicious of this when surely there are non offshore options, that the Queen could invest in without damaging her reputation.

The wealth management firm my wife works for does not offshore at all, precisely because they do not want to get caught up in these kinds of leaks. They have a lot of clients who do not like political risk or social exposure.

They're doing pretty well for themselves.

are all her customers this dishonest

The most shocking thing on this thread is that Junky assumes a cleaner to be female. 😯

Usually I'm a bit 'meh' when it comes to tax avoidence/evasion threads, not because I agree with it but because its no surprise that some of the richest people in the country are also some of the greediest

But nothing quite boils my piss like the queen doing this, whilst expecting her loyal subjects, the tax payers, to forkout around 350 million quid to renovate her home

Sooner we get rid of the monarchy the better..french had the right idea

Surely its right to be suspicious of this if there are onshore options that the Queen could invest in without damaging her reputation.

Very few onshore options for Private Equity (same for Hedge Funds). The problem is journalists just don't understand how this stuff works.

The term transparent also makes little sense

It is a tax technical term in the context I used it because you "look through" the entity and tax the underlying transactions. Hence no tax advantages.

Remember all the fuss when the Panama papers were leaked?

Does anybody know what, if anything, happened as a result of those?

Perhaps the Crown shouldn't be investing with private equity firms and hedge funds in the first place, there are plenty of less politically risky options to choose from.

The problem is journalists just don't understand how this stuff works.

I'd be careful with such general assmptions - there are plenty of investigatove journalists who understand pretty well how this stuff works.

How the jpournalists then present it back to the reading/watching public is a different matter - none of it is actually that complex though it can be complicated in how convoluted it is. But if you want your readership/watchers to remai engaged, make it easy to understand in bite sized chnks.

I don't see anything that suggests outright illegality (Ashcroft may be the obvious exception) but the principle is about morality and inequality.

When, 10 years after the financial crisis that nearly collapsed the global economy and ushered in austerity across the western world, people have seen the gap between rich and poor grow wider and wealth concentrated in the key financial centres, it's hard to ignore that the morality of how rich people avoid paying their taxes is at the top of the list.

http://www.bbc.co.uk/news/uk-41886608

on the plus side, this might lead to an improvemt in the nations telly

Perhaps the Crown shouldn't be investing with private equity firms and hedge funds in the first place, there are plenty of less politically risky options to choose from.

Is it the principle of private equity or of hedging that you find unacceptable?

@mefty - I thank you for your indefatigability but there is really no point trying to explain this anymore. Either people will invest the time thinking about what is really wrong (i.e. it's not the Queen's offshore funds), or they won't and we'll end up with the idiots running the asylum and universally detrimental outcomes (cf Brexit).

Neither really, but it is utterly false to state or imply that they could not have invested in a way that didn't expose them like this.

bainbrge - Member
Is it the principle of private equity or of hedging that you find unacceptable?

and yet here you are you are missrepresenting what Tom is saying

hes saying that hedge funds & private equity firms are unpopular & 'politically risky'

not that he finds them unacceptable

It turns out one of the mastermind tax dodge accountant's offices is only 5 miles from my office. It'd be handy to not pay any tax or NI in the run up to christmas, it would really take the pressure off and save Mrs P from worrying about whether we can afford to buy the kids any presents.

I'm sure its the same for actors/business types. It must be a real worry, whether they'll get through the next few months with just ALL THE MONEY I WILL EVER EARN.

I’ve said a few times people in the media and sports are some of the biggest tax swervers. It would be quite illuminative for people to see the tax arrangements of Russell Brand, Graham Norton or Gary Linekar for example

http://www.bbc.co.uk/news/uk-41886608

We just saw Jose M pay €3m in tax in Spain after being taken to court (Messi paid slightly more) as image rights payments where sent offshore.

What the likes of Jamba & Mefty rather conveniently overlook is the detail that the vast majority of these offshore transactions are indeed structured with the direct intent to reduce the final tax bill to the user, the original investor. That is a significant part of maximising the investment yield. There will be a point in the investment chain somewhere that breaks the connection between yield and ownership, so that in the simplest of cases, a 'loan' is made back to the investor or a gain is realised in a non-taxable location. This deliberate and frequently quite artificial action is far beyond dubious, on any decent person's moral compass.

Quite simply, as a proportion of income, the richest face the smallest tax bills and these offshore investment platforms play a major part in helping that happen.
If anyone thinks that these investment vehicles are a good idea, they should go and spend a day volunteering at a food bank. Then come back and tell us if their views on tax avoidance have changed any.

Alternatively: Off with their heads.

Referring back to the first page - presumably Gary Barlow will be asking for the large fee he paid to the tax consultant back, then? No?

Even if it is all legit, it is not a service that is available to the normal man in the street. You have to be in the wealthy club to be able to afford the advice fees, so that's unfair to begin with.

Secondly, if you are willing to incur eye-watering fees for tax consultancy and still deem it to be financially worthwhile, it must be a way of paying at least less tax than the cost of those fees - otherwise they wouldn't do it(!)

jambalaya - Member
I’ve said a few times people in the media and sports are some of the biggest tax swervers. It would be quite illuminative for people to see the tax arrangements of Russell Brand, Graham Norton or Gary Linekar for example

Well they're not swerving as much tax as Amazon, Starbucks, Vodafone et al

Thanks Kimbers, but it was just a question.

If Tom has a pension then there is decent chance some of his funds are invested in private equity, offshore vehicles, or 'hedge funds'. That's because there is nothing in principle wrong with any of these things.

Not trying to have a dig, but there is a fundamental lack of understanding on display here and mostly everywhere else that is obscuring the real issues. The Guardian/ICIJ are guilty of obscuring the issue through releasing salacious details about famous people that imply wrongdoing, but as they seem to say in every article 'no evidence of anything illegal'.

I'm quite ready to believe that artificial tax structures like the one Jimmy Carr invested in are illegal (and given changes in tax legislation increasingly difficult to achieve given everything has to be pre-notified to HMRC). I'm also sure that there is loads of illegal extraction of assets from various dodgy jurisdictions by criminal entities - that is the real story for me. However offshore funds per se are not the issue at all, especially not in the context of Her Maj and her investment decisions!

- any UK tax payer is liable to pay tax upon profits earned by an offshore fund (so doesn't matter if the fund is in Cayman or Timbuktu)
- you could of course try and not disclose your gain, but that would be illegal and increasingly likely to be picked up by HMRC.
- If the offshore fund is in a zero tax jurisdiction then there is zero tax taken at source.
- Hence there is no tax loss to the exchequer by investing in an offshore fund in this example - the tax is paid in the UK according to the gain.
- if the offshore fund was in a country that actually taxed the fund at source, then the UK exchequer would actually be worse off, because in most cases you don't get taxed twice, and there would be a tax refund from the UK exchequer equal to the amount paid at source.
- there are many good reasons to setup your fund in a tax neutral jurisdiction, especially if you have international investors, as detailed above by Mefty (and I mean good as in good that satisfies both legal and moral considerations).

Thanks Kimbers, but it was just a question.

If Tom has a pension then there is decent chance some of his funds are invested in private equity, offshore vehicles, or 'hedge funds'. That's because there is nothing in principle wrong with any of these things.

Not really, if the crown could use plausible deniability eg... the excuse "oh that wasn't us - that was the pension manager we use" - that would be the case.

The thing that you miss is that whilst in many cases there is nothing wrong with investing in private equity, it attracts far far too much attention from the press and the public - for that reason, I am quite surprised that the crown got caught up in all of this - with their history of watching the French revolution unfold over the channel etc.

Yes, I don't have the best understanding in the world in regards to finance, but I do know my wife works for a firm that goes out of its way to make sure that clients are not tarnished like this.

@kilo Agreed

How's about anyone who registers as "non dom" for tax purposes also give up their British citizenship at the same time, seems fair enough to me. One area where the Americans do seem to have got it right in my book.

Dickyboy - Member
How's about anyone who registers as "non dom" for tax purposes also give up their British citizenship at the same time, seems fair enough to me. O

good idea, lets ask Lord Ashcroft

hes just here, oh hang on....

[img] [/img]

Best give him citizenship of the toilet?

How's about anyone who registers as "non dom" for tax purposes also give up their British citizenship at the same time, seems fair enough to me.

Non Dom should be abolished full stop. Greatest number of non dom's where registered during the Blair/Brown era FWIW

@Kimbers what you are doing (and it's not just you it's just you posted above) is trying to turn this into some sort of political / class war bollix when sports people and actors/performers are some of the very biggest tax dodgers.

What really makes my blood boil is when the BBC supports tax avoidance on performers incomes. That's licence fee tax payers money.

There is a material difference between investment products which look to crystallise taxable gains at maturity and people using offshore havens as a way of avoiding income tax.

The BBC should hire people on PAYE only, this includes any production companies. All staff must receive all income via PAYE. If they cannot comply they cannot be hired.

jambalaya - Member
How's about anyone who registers as "non dom" for tax purposes also give up their British citizenship at the same time, seems fair enough to me.

Non Dom should be abolished full stop. Greatest number of non dom's where registered during the Blair/Brown era FWIW

@Kimbers what you are doing (and it's not just you it's just you posted above) is trying to turn this into some sort of political / class war bollix when sports people and actors/performers are some of the very biggest tax dodgers.

What really makes my blood boil is when the BBC supports tax avoidance on performers incomes. That's licence fee tax payers money.

There is a material difference between investment products which look to crystallise taxable gains at maturity and people using offshore havens as a way of avoiding income tax.

The BBC should hire people on PAYE only, this includes any production companies. All staff must receive all income via PAYE. If they cannot comply they cannot be hired.

Y’know what?

I agree with you.

@Kimbers what you are doing (and it's not just you it's just you posted above) is trying to turn this into some sort of political / class war bollix when sports people and actors/performers are some of the very biggest tax dodgers.

really? I posted a link to the BBC TV stars tax dodging on the last page

but you keep telling me Im only out to slag off the tax dodging Tory/Brexit donors if it makes you feel better

What really makes my blood boil is when the BBC supports tax avoidance on performers incomes. That's licence fee tax payers money.

[img] [/img]

The BBC should hire people on PAYE only, this includes any production companies. All staff must receive all income via PAYE. If they cannot comply they cannot be hired.

isnt the problem that the BBC doesnt make the shows, it buys them in from production companies? would it be legal to enforce that kind of restriction, sounds like a good idea, plenty of direct government contractors eg ATOS & G4S go to great liengths including offshore tricks to avoid/evade tax

At last something to laugh about "Mrs Brown's Boys" hope it truly feks up their public image & they get dropped never to grace our screens again.

I agree with that!

God awful programme.

Kimbers what you are doing (and it's not just you it's just you posted above) is trying to turn this into some sort of political / class war

And your issue with that is?

Also, that is rich coming from a "**** the elites" Trump supporter.

Non Dom should be abolished full stop. Greatest number of non dom's where registered during the Blair/Brown era FWIW

100% agree on both counts.

I've just written to my MP to demand that we prevent non-domiciled individuals from making contributions to political parties and to ask for firm commitments to dealing with tax evasion. However he has his er, hands full right now fighting some allegations that he couldn't keep them in his pockets.

you could of course try and not disclose your gain, but that would be illegal and increasingly likely to be picked up by HMRC

As long as the HMRC found out, which us course is made more difficult by the fact that one of the more obvious benefits of off shore is the lack of public disclosure. Sure, they'll say they comply with all enquiries... As long as the tax authorities know what to ask.

Labour rent their London HQ from an offshore trust (imho a perfectly normal thing to do - hold a property asset in such a trust)

https://order-order.com/2017/11/06/labour-rent-hq-offshore-trust/

Tom as I posted many times on the Trump thread I would have voted for Hillary but with a heavy heart - the better of two very poor candidates. The Democrats are way to the right of our Tories fwiw imo

I suspect there are few on here as anti as me re non Doms, I have had colleagues and a boss (owner of firm I worked for) who had that status. Its a disgraceful and humungous tax dodge.

Oh look, our old friends Apple are involved again...just how profitable does the most profitable company in the world need to be?

Their greed annoys me more than any individual.

What exactly has Hamilton done? Is it just a more complex version of not paying vat on a company vehicle when he uses it privately? So pretty much the same as every "white van man" then?

[url= https://www.cnbc.com/2017/11/06/tax-avoidance-is-a-legacy-issue-oecds-angel-gurria-says.html ]Important to get a sense of perspective[/url]

Bottom line is that most people will try and get away with paying tax if they can.

No. No they don’t.

I’m not sure I could give many you-know-what’s about Lewis Hamilton doing that Tax Haven of the IOM out of some VAT on a plane that might only visit the UK 2-3 times a year.

The problem is journalists just don't understand how this stuff works.

Don’t let facts spoil the fun. Great to see how well our future Chancellor understands the issues here

Triple latte please !!!!

Wailing and gnashing of teeth from the BBC regarding Naughty Apple.

What I missed was the part where they said they wouldn't buy or help promote Shiny Apple's products until Naughty Apple paid tax where it earned its money.