The Wealth Bulletin (what a grotty title) notes:
Financial advisers are starting to refer to their wealthiest clients as billionaire nomads -- those who globe-trot between homes to avoid direct taxes from any country.
Ultra-high net worth families have always been mobile, but the crackdown on offshore accounts is making them even more so. A few have even taken to living on megayachts, apparently deciding that pirates on the high seas are less of a risk than dodging the remorseless embrace of tax authorities.
The wealthy are turning peripatetic as a result of the tougher attitude toward offshore bank accounts. This gathered pace last week with the deal between the tax haven of Liechtenstein and the U.K., which involves 5,000 British investors with accounts in the Principality being told to come clean in return for limited penalties.
Many wealthy families will want to avoid these types of difficulties by swapping offshore accounts for residency in lower tax jurisdictions, or even seeking permanent nonresidency.
Which is precisely why I have, for some time, advocated a passport basis of taxation for the UK. The message would be simple: if you have the passport you pay tax on your worldwide income unless tax resident in a state with a full double tax agreement with the UK (which is why we should give them sparingly) .
To give up the passport you would have to break all ties with the UK — including any right to return. OK, European cooperation would be needed on that, but I don’t see it as being hard to secure.
Not many would do that.
It may seem extreme, but it isn’t: these people are not stateless; they’re free-riders seeking to abuse the rest of us. That means we should tackle them head on because there’s not a shadow of a doubt that we’ll be better off without them if they don’t pay their way.
As for the notion that they ‘add value’ reflect on this: when was the last time that someone added value by dealing with someone who refused to pay what they owed?
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I think residence is the right basis for taxation. You benefit from living in a society, you pay your fair share. There are simply too many ways this could cause problems for people on moderate incomes, to say nothing of the difficulties of enforcing this.
There are also many countries with weak tax systems with which Britain does have double tax agreements – especially third world countries.
As for the rich nomads, I do not think much of their quality of life if they are committed to constant migration, an even self imposed exile at sea!
A better way of dealing with them would be to further tighten rules on residence, so that they cannot effectively run a business in Britain without becoming resident. This would also not, I believe, require cooperation from the EU.
Living on their yachts!
Just think about it! They are so rich they have yachts…yet their obsession with money means they would rather live on a yacht than pay tax.
The mind boggles about these people. I mean, really, what is wrong with them!? The greed is phenomenal.
Oh, they may be ripping us off and free-riding…but hey, at least we’re not as horribly diseased and rotten on the inside as they must be to go to such ridiculous lengths.
Freaks!
what we need is a confederation of low tax states (Jersey, Guernsey, Switzerland, Monaco, Cayman, London if it chucks out the agitators) that could chip in an buy a nuclear deterrent (maybe get a submarine from the Russians that can fire it) and then invite wealthy people to spend their time hopping around between them. That would seem to cover all bases.