Live in Low Tax or Territorial Tax Countries

Published / Last Updated on 11/07/2023

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:

Low Tax Countries

Most countries have taxes that are levied on income or gains.  That said, most of the western world has higher taxation when compared to emerging markets or developing economies.  Therefore, you may wish to consider moving to a low tax country where you will still pay income taxes and capital gains taxes as well as some that also have inheritance or gift taxes.  Many are lower than the UK with some having tax rates as low as 10% and higher tax bands at just 20%.   This may be attractive to some.

That said, if there is no tax treaty between the UK and your country of choice, any UK deirived income or gains will be taxed in the UK.  Some countries (we have 4 on our shortlist), offer low taxes with a double taxation treaty with the UK meaning that UK derived income (except state pension and other government pensions and UK assets) will not be taxed in UK but will be taxed in your country of choice at lower rates.  Other low tax countries do not have a double tax treaty with the UK, so you will pay local (lower) taxes on income/gains derived in that country and also higher UK taxes on UK derived income/gains.

Territorial Tax Countries

These are countries that have local income and gains taxes but for any income or gains that are derived outside your preferred country, no tax is payable.  This means that if you have investments in say offshore jurisdictions where there are no taxes on your investments, when you come to draw income or gains from them, no tax will be payable in your country of choice if it is a territorial tax country.  The UK cannot tax you as you not tax resident in UK with offshore investments outsode UK and your new tax resident countries does not tax on assets outside their territory.  This works for many countries unless the offshore tax haven is blacklisted.

We have 11 territorial tax countries on our shortlist and a couple of jurisdictions that stand out.

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 between $30,000 and $4,000,000 in residential property and/or a Government/National Development Fund depending upon the territory (this is the usual route to achieve tax residency).
  • Some have very low capital investment or income requirements as low as $1,250 pm.
  • Our preferred locations start at a minimum $200,000 investment, this is a low capital investment requirement when we balance this with better health care and infrastructure facilities.

Reminder:  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: Live Tax Free

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