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Offshore - I'm a bit clueless

9th Mar 2015
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All my life I have known about things being 'offshore' and tax havens - for about as long as I could reliably separate the Isle of Man from the Isle of Wight. I never (as a child /young adult) really thought what that meant - just knew it was a 'thing'. I thought about it a bit more when in Jersey many years ago on honeymoon.

Now (please note this in no way impacts my professional work) am I being a bit thick - but surely just because you have funds located off shore that does not mean you can simply forget to mention the interest etc. Is the whole deal behind offshore being that the supposed secrecy means that if you don't 'tell' no-one else will 'tell' on your behalf?

In which case - what is the possible legitimate reason for all this secrecy? Surely the whole thing is a bit rotten.

Having said that, I chuckled at (Lady) Margaret Hodge getting a bit huffy about not getting a simple yes or no answer from the HSBC chap today - pots and kettles spring to mind.

Conversely - I quite like the sport of her committee hearings, even if I don't really share her politics much.

Working safely in industry (with a small sideline, and, I admit, ATT) I thought I ought to try and educate myself a bit more about all this stuff purely for interest.

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David Winch
By David Winch
09th Mar 2015 21:38

Some years ago a gentleman of my acquaintance who was employed by the boys in blue said that people put money offshore, "To hide it from the police, to hide it from the taxman or to hide it from the wife".

I am sure that even then his sentiment was neither politically correct nor entirely accurate!

But you can see his point.

David

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By Alan Davies
10th Mar 2015 09:26

Not in my name....

If you hold money in an off shore tax haven in your own name but don't tell anyone that is tax evasion.

If you hold money in a trust or company in an off shore tax haven but don't tell anyone that is tax planning.

The difference between the 2 is something to do with fees to professional advisors. 

I'm sure a tax advisor will come along soon to give a slightly more serious answer.

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By jiatbanus
11th Mar 2015 11:32

Offshore!

One person's Offshore is someone else's Onshore.

It is only Tax Evasion if you do not declare INCOME from funds held offshore.

The other side of the coin is the "money laundering" aspect which is designed to root out criminals. If that was really the case, why does the MLA contain legislation related to Tax and Tax Evasion. Do you think drug and gun runners really care about tax and, if the MLA tracked them down, would tax evasion be the primary concern.

Trusts and Foundations have been in existence for hundreds of years and are useful to those who need and can afford them.

As to Margaret Hodge! Since when was tax MORAL? Necessary -YES. Abused by government - YES. Morality does not come into it. The laws should cover that.

 

 

 

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By ShirleyM
11th Mar 2015 16:15

There's lots of ways of abusing 'offshore'

I am no expert on these matters, but no matter how much of your trade takes place in the UK, just make sure that you raise the sales invoices in Southern Ireland, or wherever.

Or you could create your 'head office' in Luxemburg. I think it doesn't even need to be staffed and you may never make a sale in Luxemburg, but that doesn't matter. Luxemburg will love you. You may have to visit (in theory) the office to make those 'company decisions', etc. etc.

I've probably got a lot wrong, but that's the gist of it.

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By jiatbanus
11th Mar 2015 18:34

Offshore account.

Some time ago - circa 1983 - the Government of the day introduced tax on interest at source. If tax was not due, you had to reclaim it. At that point I opened my first "offshore" account. I was legally paid gross interest and I declared it for tax.

Nowadays, and from foregoing comment, this is probably perceived as probably "illegal" but certainly immoral.

I don't get it.

I don't hear anyone criticising inheritance tax.

And how stupid has it all become.

I arranged a transfer from my account with a noted high street bank who I have banked with since 1963! I needed to pay 200 Euros speeding fine and the transfer was to a Spanish Solicitor. The bank called and, before they were prepared to transfer the funds, they wanted to know the full personal address and status of the person who the transfer was going to; The LAWYER! I think m rather colourful language encouraged them to complete the transfer - though they did not tell me they were doing so.

This is the result of the Margaret Hodge and Gordon Brown syndrome. "Let's block Offshore".

May I remind you of Geoffrey Robinson and Peter Mandelson - to name but two.

    

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