Fate conspired to ensure that I caught the end of Piers Morgan on Marbella on TV last night. He was talking to a British expat from Sunderland, James Yeung, who is"living the high life in Marbella after buying a flat in the tax haven of Gibraltar then selling his business in the UK and saving a fortune in capital gains tax."I listened to the interview and wondered how soon it would be before Mr Yeung receives a visit from the taxman. He told us that he sold his business for £2m and did not have to pay CGT as he had established residence in Gibraltar. The impression given was that this was as simple as buying a small property there. He doesn't live there though. He now lives in Marbella. I hope he left the UK before he sold up and doesn't plan to return.
Oh dear. I imagine a few accountants and tax advisers will be asked to advise clients on this "wheeze" over the next few days and weeks. Possibly even more people will attempt to replicate James' escape from CGT without taking advice. And of course there will be questions in Parliament and demands that the rules be changed to prevent such "outrageous" and "blatent" tax avoidance.
Er. The UK tax rules don't allow it. Which means a number of key issues weren't mentioned in the interview. And if it were that easy to take up residence in Gibraltar I imagine I would have heard about it before now. I note that Piers Morgan has also visited Gibraltar so perhaps we shall learn more when that episode is broadcast.
In the meantime if you want to know about capital gains tax planning that is based on more than simple holiday sand, do contact an independent tax expert.
So what is wrong with ensurign that you pay the least tax possible by legitimate means. With a bit of luck we might get the MP's leaving the UK PERMANENTLY on the 5th April 2010 and exchanging contracts on their second homes on 6th April 2010
ReplyDeleteBTW now that I have published my comment (Anon 2 9:26pm) I trust that you will be quite happy to get my emails from a place you clearly know I'm not so that HMRC can be persuaded that I am now non-resident.
ReplyDeleteOf course I'll wait for the wee buff envelope and request for my Malta and Cyprus bank accounts and credit cards. I suppose I don't need the Offshore Disclosure or any Other Amnesty - now that I'm not really here
Bill Stevenson
Cheers guys. Think you're teasing ME now! ;-)
ReplyDeleteMark,
ReplyDeleteYes ...,but the sspelling is;
GIBRALTAR
Attention to detail is obe of the boring but vital requirements of our chosen way to spend our lives.
Peter Lashmar
Thanks Peter.
ReplyDeleteI wholly agree. Mea Culpa.
Now corrected.
(Ironic error in your own post?)
Mr Yeung was ill advised to make those comments (if he was advised at all). Technically a category 2 resident of Gibraltar can spend as little as one day here and be treated as resident. That is justthe way the legislation is written to allow (very limited) taxation of that persons income. The real question is, will the Spanish tax authorities, or the UK revenue, accept he is not resident in either of those jurisdictions?
ReplyDeleteSurely if you can not prove quite a few days spent each year in either Malta or Gibraltar some tax Authority is going to try and say you are spending a lot of time that has CGT. One may find the Tax people need proof of where the time is really lived. Am I correct
ReplyDeleteWhich has the CGT advantage over the other Malta or Gibraltar. I can meet the requirements for both as a resident but wonder which is the best choice.
ReplyDeleteThanks for commenting Anonymous. I can't tell if there's one or two of you. I'm sorry but we don't offer a free tax advice service on this blog (or indeed, anywhere else).
ReplyDeleteTax Advice is available through members of the Tax Advice Network