Sunday, Nov 29, 2009

A housing loophole for the super-rich

Times: Tory Zac Goldsmith admits he is a non-dom

Zac Goldsmith, the green adviser to David Cameron and prospective Tory MP, has admitted that he claims non-domicile tax status, enabling him to avoid huge sums of tax on his estimated £200m fortune. He can legitimately escape paying tax on his inheritance, much of which is held offshore. In an unusual arrangement, some of his British properties are held offshore. Goldsmith’s 300-acre ecological farm in Devon and a £7.75m house in Richmond are both owned by companies based in the Cayman Islands. A spokesman for Goldsmith said the homes were “made available” to him by a trust set up by his father. [More analysis in the comments below].

Posted by drewster @ 12:20 PM (1767 views)
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1. Cheekie Charlie said...

Here's the new boss. Same as the old boss. The Who.

Sunday, November 29, 2009 12:27PM Report Comment

2. drewster said...

This loophole is used by many wealthy families. It avoids inheritance tax and tax on investment income. Here's how it works:

1. Register a trust in the Cayman Islands.
2. Transfer your property, land, and all other wealth to the trust.
3. The trust makes the property available to you, charging no rent.
4. You continue living in the property.
5. Your household bills, your cleaner, gardener, housekeeper, chef, chauffeur, etc. are all paid for by the trust, out of tax-free income from your other wealth. You can expand your property, build a swimming pool or a helipad, with money from the trust.
6. When you die, your offshore assets are not held in your name and therefore no inheritance tax is paid. Your heirs simply become the beneficiaries of the trust.
7. If the Inland Revenue come knocking, asking why this trust in the Caymans is so generous to you, you can simply deny all knowledge. The Cayman Islands secrecy laws mean they don't have to divulge any information about who controls the trust.

Zac Goldsmith is certainly not the only one. Read this excellent Guardian exposé about how Hans Rausing, owner of the TetraPak empire, avoids almost all UK tax:

Guardian: How the richest man in Britain avoids tax
For 20 years, Hans Rausing has lived quietly in a purpose-built palace at Wadhurst Park in East Sussex. His private grounds stretch so far that the boundary is more than 10 miles long. Deer lounge in his pastures, which roll down through his own private valley to his own private lake. Inside the palace, Rausing walks on marble floors, warmed in winter by underfloor heating, taking his leisure in the gold-fitted Jacuzzi or in the indoor pool or among the tropical plants in the conservatory hothouse, served throughout the year by his housekeeper, his secretary, his chauffeur and his part-time cook.

Sunday, November 29, 2009 12:30PM Report Comment

3. mark wadsworth said...

While all bad publicity for the Tories is good publicity, but on a personal level fair play to him, is all I can say.

Now, if we scrapped Inheritance Tax and rolled it into Land Value Tax on all UK land wealth, there'd be no such loopholes. Job done.

Sunday, November 29, 2009 12:44PM Report Comment

4. letthemfall said...

Fair play to a tax dodger who hopes to be part of a UK govt? I don't think so. This inheritor obviously has little commitment to this country. Still, he sits well with all the other wealthy Tories that stand to inherit a fortune. No wonder they wanted to up the limit on inheritance tax.

Sunday, November 29, 2009 01:57PM Report Comment

5. paul said...

It has to be said that I'm really glad the media has pounced on this kind of corruption. I chose that word carefully, because that's exactly what it is. If we found out that politicians in Jamaica or Haiti were using loopholes to prevent them paying tax, we'd decry it as shameful and an abuse of power. But somehow because Britain is not a hot country and is run by white folks in nice suits, it somehow seems okay to accept this (or rather, it is rarely taken up by the media).

Sunday, November 29, 2009 02:27PM Report Comment

6. will said...

So do our taxes (paid up) empty their dust bins ? Disgusting - shame on you.

Sunday, November 29, 2009 04:05PM Report Comment

7. Revolting Pleb said...

Pray tell.
How much does a 300-acre ecological farm receive in farm subsidies, or is that Tax Payer funded subsidies?
Don't do as I do...... pay your taxes as I say.

Sunday, November 29, 2009 04:39PM Report Comment

8. icarus said...

All this is nothing compared with the way the fortune was accumulated by Goldsmith's father.

Sunday, November 29, 2009 05:45PM Report Comment

9. Alfie said...

Both the Tories and Labour are crooks, its the working class who run Britain and the wealthy just bleed it.

Sunday, November 29, 2009 05:59PM Report Comment

10. doomwatch said...

icarus, illuminate us. Friendly with the Red Shields was he ?

Sunday, November 29, 2009 10:01PM Report Comment

11. mken said...

no representation without taxation

Sunday, November 29, 2009 11:01PM Report Comment

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