Live in a Tax Free Country to Reduce Tax
Published / Last Updated on 07/07/2023
Some people are fed up with high taxation in the UK with 90% of all taxes paid by just 5% of the population and regularly, we are contracted by people to establish the most tax efficient places to live and pay no taxes or lower taxes or territorial tax regimes based upon an individual’s circumstances. Most of us accept that some taxes need paying for the benefit of all society but equally many get to a point where they feel they have already paid or are paying too much.
These services are usually for high-net-worth clients or high earners with many saying, ‘why should I have 45%+ of my hard earned wealth taxed and then when I die, 40% of everything that I own be taken for inheritance taxes?’ Granted, there are some people who are born into inherited wealth but there are many entrepreneurs that started with nothing and then get penalised for having worked 7 days a week for years to make their businesses successful or grow their wealth with clever investment or sometimes gambling all that they have to achieve a goal or have lived out of suitcases and away from home for long periods to build a future for their families.
We are not going to share our research on individual country taxation as this is valuable research and each individual will have different needs and requirements, but do offer the following pointers:
Living Tax Free
|
|
Local Income and Assets |
Foreign Income and Assets |
|
Income Tax Rate |
0% |
0% |
|
Capital Gains Tax Rate |
0% |
0% |
|
Inheritance Tax Rate |
0% |
0% |
In our research there are up to 17 jurisdictions that offer you tax free living, mainly in the Caribbean, the Middle East and various smaller jurisdictions in the Pacific and Indian Oceans.
Of the 17 tax free jurisdictions:
- 2 countries charge a yearly wealth tax.
- 7 countries offer citizenship and a passport after a period of residency which may appeal to some.
How to Become Tax Resident:
Most jurisdictions will require you to invest in the local economy or have minimum guaranteed, independent income. Many require you to:
- Invest in a Government/National Development Fund (usually between $150,000 and $750,000 depending upon the territory and/or
- Invest between $185,000 and $2,500,000 in residential property depending upon the territory (this is the usual route to achieve tax residency).
As you can see, the costs can be high but for some, this still may prove to be attractive when compared to taxation rates in the UK, Europe and North America.
Generally, you will pay more for goods and services as there are usually higher sales taxes and nothing is free, you will need to pay more than you expect for healthcare, dental and other items, but again this may be outweighed by tax savings.
Care: If you have income derived in the UK from UK pensions, investment or property, you may still have to pay tax in the UK if there is no tax treaty between your new country and the UK. That said, if you have offshore assets, they will no longer be taxable in the UK.
Also, take a look at: Low or Territorial Tax
