Pay Zero Income Tax the Legal Way - Premier Offshore Company Services
Your Money. Personal Finance.
- Featured channels;
- Bestselling Series.
- ICSID Reports: Volume 6 (International Convention on the Settlement of Investment Disputes Reports).
- Anabaptists Meeting Muslims: A Calling For Presence in the Way of Christ.
- Where's My Refund?.
- Microstrip filters for RF microwave applications.
Your Practice. Popular Courses.
Talk to a Tax attorney.
Login Newsletters. Taxes Income Tax. A person must live in the principality for six months and one day out of the year to be considered a resident. Compare Investment Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation.
- Top 10 Offshore Tax Havens in the Caribbean.
- Second Residency in Tax-Free Countries.
- Navigation menu.
- Retirement Account.
- Wealth Safe | Legally Minimise Your Taxes to Almost Zero?
- Get Second Residency and Pay No Tax in These 18 Tax-Free Countries!
- Netters Infectious Disease, 1e?
- Browse more videos.
- Account Options.
- 18 tax-free countries where you can get second residency.
- Panzer III vs Somua S 35: Belgium 1940 (Duel, Volume 63).
- Featured channels?
Related Articles. Budgeting Looking to Retire in Monaco? Here's How. Partner Links.
Solidarity Tax A solidarity tax is a government-imposed tax that is levied in an attempt to provide funding toward theoretically unifying or solidifying projects. What is Capital Gains Tax? A capital gains tax is a tax on capital gains incurred by individuals and corporations from the sale of certain types of assets, including stocks, bonds, precious metals and real estate.
Home legal definition A home is a person's permanent primary residence to which they return, or intend to return. A value-added tax is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale.
Online Mr L Hadnum Non-Resident Offshore Tax Planning 2014/2015: How to Cut Your Tax to Zero
Typically, this type of corporation has a legal existence but provides few or no actual products or services. One classic way of using these companies is buying and selling through them, which means that the owner does not need to report international operations conducted through the shell company and will be able to avoid any taxes on the profits.
Shell companies are also used to conduct various other pieces of shady business, including selling supermarket brand goods without impacting the value of the main brand. Republican presidential candidate Mitt Romney recently got into hot water over claims that he has been evading the government's claims on his finance, with one of the accusations that he channeled his income into a shell company in the tax haven of Bermuda.
An equity swap is another shady method of tax evasion. Basically, it's an official agreement that allows two parties say, two rich individuals or companies with in interest in reducing their taxes to exchange the gain and loss of a set of assets without actually transferring ownership.
One of these swaps is generally pegged to a fixed rate, like LIBOR, which means that the participants can expect a fixed return, either in one payment or at several predetermined points.
This exchange of value allows the parties to avoid transaction costs and, in some cases, local taxes pegged to certain locations. This is obviously a sneaky bonus for people who want to avoid high taxes in a particular area while still getting the benefits of owning assets in another. Capital gains tax automatically kicks in from the sale of certain valuable properties, such as shares, and acts as a deterrent on investors cashing them in. Obviously, though, a number of rich people are interested in avoiding this and have found legal loopholes to allow them to do so.
One cunning way of dodging capital gains tax is by borrowing from an investment bank with the shares as collateral after purchasing options, which set their price at a fixed rate. This sneaky option allows the borrower to avoid triggering the capital gains tax that would come with actually having the money at hand, while giving them the free cash — and allowing them to repay the loan — either from the profits of using the money or by handing over the shares themselves.
Talk about making your money work for you. Different places may call it the death duty, the estate tax, or the inheritance tax. But whatever the name, one thing's for sure: most countries have ways of taking a percentage of a person's possessions and capital once they have bequeathed it after passing away. While this may arguably be considered unfair, the methods some millionaires use to dodge this tax will make your hair curl. The main problem with estate tax is that it only focuses on the actual property and capital owned by an individual, and there are a number of exceptions to the assets that it can target.
One especially effective way of dodging it is to set up a GRAT grantor retained annuity trust — basically a trust fund , which invests the money for you: any income earned over and above the interest is completely free of income and estate taxes. Estate tax isn't called the last "voluntary tax" for nothing: virtually anyone with the savvy to have earned any money in the first place can set up this loophole, and it's completely legal as well. Subscribers to this kind of "tax plan" pay money into a trust fund, which accepts their money as "donations.
Thus, by disguising their salaries as loans, the members can write off much of their income tax. This little legal loophole may have technically been within the law when it was devised, but it still looks like one of the shadiest tax dodges on the market to us.
In legal terms, there are many advantages to being a company and few to being an earner in the top tax bracket. As a result, a large number of celebrities have incorporated themselves in order to avoid various forms of tax. For example, by channeling your wages into a nominal "corporation" you are able to pay yourself a small, interest-free wage, claim expenses, and reduce income tax. Others have devised even more cunning loopholes: take, for example, Mitt Romney's recent maneuver of claiming the management fee of his corporation as a capital gain rather than income, which reduced his actual rate of tax rather sharply.
Payments-in-kind was a former tax loophole that has, fortunately, been rendered obsolete by tighter regulation.