Submitted by Sestini & Co
| on Mon, 10/21/2013 - 6:21 | In Uncategorized
Did anyone else find it odd that anyone believed Richard Branson and his wife might be living on Necker Island purely as a tax dodge rather than because it is a truly amazing place to live? (http://www.bbc.co.uk/news/uk-24513875)
I can’t claim to have an inside track on his precise reasons for the choice, but personally I would happily live there without any tax breaks at all. It is his very own paradise. Of course, he went to the trouble of buying an undeveloped island and spending the time and money to turn it into somewhere he could live, which a lot of people probably wouldn’t bother to do.
So, Richard Branson is not resident in the UK and therefore doesn’t pay the same tax as a resident, capital gains tax being a particular case in point. Is that really something to make a fuss about?
I’m not sure anyone knows how much corporation tax in total his companies and those he has invested in, supported and mentored have paid over the years, both in the UK and elsewhere. Nor the total PAYE and NIC for all his employees. Nor the total paid into pensions (which may therefore potentially produce savings on tax credits in the future). I could go on – but a lot of people would stop reading if I do.
So, whilst I firmly believe tax evasion is wrong (as well as being illegal) I do object to this widespread villification of anyone who happens to live in a way which reduces their tax liability, as though there is a moral imperative on the wealthy to go out of their way to pay more tax than the law stipulates.
I’m sure many of the people currently up in arms about what they perceive as “unfair” tax avoidance still see no contradiction in paying into a pension and/or an ISA and feel no need to save for their retirement and family’s future in a less tax efficient manner. Even if they could, by other people’s standards, afford to pay a little bit more tax.
I am known for being rather conservative when it comes to tax planning, preferring that any planning undertaken is sensible, in context, sustainable and defensible. However I also believe that everyone is entitled to the deductions and reliefs set out in the taxes acts. We now have specific legislation which sets out whether someone is UK resident or not, whether someone falls into the definition is a question of fact. And yes, it is possible to become a long-term non-resident by living outside of the UK – but surely that doesn’t mean the authorities, press or any other faction are entitled to tell us where to live?
If you’d like to discuss potential tax planning you might be missing out on, to seek reassurance on your residence status or debate where the line sits in terms of acceptable and non-acceptable tax avoidance, please contact us at email@example.com, on Facebook as Sestini & Co or on twitter @Sestini_and_Co, we’d love to hear from you.