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It most cases only some of that money (and likely only a small fraction) has been taxed. Much of the value of a property will be from the (untaxed) growth of its value over time.

Yep. This makes total sense. I hadn't thought about it like that. Thank you for the clear explanation.

It's easy enough to get around. The surviving parent marries the partner of one of the children. Parent dies, partner is now free to marry whichever of the children they were with. No IHT, bingo.

#awkwardboner ^

It's a bit like when I order something from Amazon, isn't it? I've already paid income tax, yet Amazon are expected to pay tax too, surely that's "double taxation"..?

It's a bit like when I order something from Amazon, isn't it? I've already paid income tax, yet Amazon are expected to pay tax too, surely that's "double taxation"..?

It's quadruple taxation! Amazon also pays its employees so it's paying Income tax there, and it's collecting large amounts of VAT from customers too. It's so unfair!

So, I'm paying VAT out of money I've already been taxed on? That makes it quintuple...

VAT is strange. That is all.

Truly weird! Who would do this?

I'd just like to point out that inheritance tax is only discussing property as it's the only part of the money that can't be shifted via a tax haven. It's nice to make the idea appeal to more people by mentioning "the average hard working guy who has saved to buy his house" but for most of the uk outside london the 325k easily covers that. If you have your non-dom status and money going all offshore and whatever you then can't declare your uk property is overseas so it's an unavoidable tax as whoever inherits it needs to be in the uk when they accept the deeds. I wish they would just close the huge holes and clamp down on "tax avoidance" then 40% of anything would be a thing of the past as with all the dodged taxes coming in 10% would probably do fine.

What happens to offshore money when it is brought onshore?

fancy a holiday to the colonies? now's the time to go! live like a king for a week for the price of a round.

http://www.bloomberg.com/news/articles/2015-12-09/south-africa-removes-finance-minister-triggering-slump-in-rand

Puts local quids out of work and goes on benefits.

Why would anyone be dumb enough to do that?

Oh and Crickhowell.

What you mean spend money in the UK (or another onshore jurisdiction).

It's all well and good amassing wealth offshore to reduce the impact of tax on your wealth generation and give you options. But if you live in the UK and you plan to spend that money, at some point then you need to bring that money onshore.

What happens to offshore money when it is brought onshore?

Depends whether you bring it back in during an offshore amnesty with reduced tax rates (the US is due one soon), but generally you want to avoid bringing it in at all. But how can you use it if you don't bring it in?

Well, most big corporations (e.g. Apple/etc) don't need to bring it back in (and pay tax on it), they use the money in offshore accounts as the guarantee for borrowing the money they need in the US (at a nice low interest rate). That way they get access to the equivalent sum of money without having to pay the taxes to bring the original dosh back into the country. The interest payable on these loans is also tax deductible (on company profits) to some degree too so it's a double win.

Why would you need to bring it onshore?

You can buy just about anything with offshore money and claim it's an offshore asset either owned by you with non-dom status or owned via an offshore company you own majority share in and then it just stays offshore. Offshore goes beyond physical locations such as Crickhowell.

. But if you live in the UK and you plan to spend that money, at some point then you need to bring that money onshore.

(Crudely simplified.)

Borrow against the money offshore
Invest the borrowed money to make more money
Use the profits of the borrowed money to pay the interest and repay the loan so no new tax is liable (as all profits are taken up by interest and capital repayments)
Eventually an onshore entity is left owning the assets you invested in, all from onshore money

Welcome to finance. You make money, the accountants/financiers make money, the Government doesn't make any money. Trebles all round.

Why would you need to bring it onshore?

This.

^^ Not this.

So when you buy a new TV for your place in Batersea from John Lewis using your Jersey credit card you just tell HMRC it's for your company and its aok because conceptually you haven't remitted any money?

I am clearly missing something. I understand that you have scope with certain assets, but I thought that if you are UK dom you pay UK tax to start with, so there's no tax on remittance. If you're nondom, you ultimately have to pay tax when you spend that money in the UK.

Simplistically, you don't get taxed on spending money, other than sales taxes.

I just stuff £5k in each pocket on my fortnightly trip back from the isle of man.

lovely b'n bs there.

No that would be silly.

But you could setup a rental agreement between you and the offshore company you own that owns the television to send any money you happened to have onshore offshore to pay for the rental.

Only £260k p/a? How is one supposed to live on that?