Tax Research UK

Dear Richard Murphy
Have just read your piece in The Crash as my son Toby Lloyd has written in it as well.
My idea for zapping tax havens is to get the OECD or G20 to agree that the price of a banking licence from any member country is that a licensed bank cannot handle any money which comes from a secrecy jurisdiction.
There would have to be an amnesty period for a year whilst funds were allowed to come onshore.
No doubt some of the tax that was then recoverable on newly deposited funds would have to be used to help the tax avens’ economies adjusut but that would be a price worth paying.
Best wishes
Stephen Lloyd

It it great to see an econimist/accountant like myself talking sense re economics and politics. Good Luck on Radio 2

S

or even an economist!!!

Dear Richard,

Controversy is raging in Ireland about the government’s proposed bank rescue. We are being told that the senior debt / bond holders of AIB, BoI and others cannot be touched to help pay for the mess the greedy property developers and reckless banks got us into. The figures are mind boggling 60 billion give or take a billion. Instead the taxpayer must pay up before the senior debt loses anything. In truth, the government plans to protect the shareholders and the subordinated debt above taxpayers - but I think a couple of hundred thousand people marching on the streets (very likely) will overcome that notion. That brings us to the senior bondholders. I understand that they are sophisticated investors whose loans are securititised against the banks assets. I am guessing that they are also tax savy and may have made arrangements (entirely legal I am sure) to protect their coupon income. Do you think it is possible or reasonable to impose a hefty withholding tax to get some value for the state guarantee backed by our taxes for the next 15 years? If the bondholders are legitimate, loyally declaring tax in their non tax-haven home country, they will be able to demonstrate that they are tax compliant and the Irish withholding tax in Ireland can be returned. If not, well they could sell their bonds back to the reformed bank owners - at a discount.

Is there any precedent for this? I am writing a report for environmental NGOs which will also go to the Green Party, a partner in government.

thanks and great work

Emer

Richard, your interview with Jeremy Vine today was extremely thought provoking and left me thirsting for more of your views/thoughts. Your “take” on recent financial and economic events and their ramifications for joe public and UKPLC was a breath of fresh optimistic air. Could you point me to any of your articles/books/essays/papers? I am very keen to understand what really happened and why, and where we all go from here. Clearly you do not believe: “to hell in a hand cart”!!
I am reading Peston and Marr et al. and trying to follow the audit trail from sub-prime, Lehmans, N. Rock, QEasing, hedge funds etc.
Any guidance gratefully received.

Dear Mr Murphy
I just listened to your optimistic views on the UK economy. I have two issues that bother me though. I think higher the GDP the better. If that is correct the Govt should encourage invetments which require the banks to lend more money. Although Alaister Darling keeps hinting that this is to be encouraged the banks seem to ignore their role in this. They seem to live in another planet. Secondly, the banks fear with their past hidden toxic debt burden could be mitigated by attracting national saving. Here again the banks are reluctant to attract savings by holding the low interest rates. I realise people should be encouraged to spend money to avoid recession but I do think healthy national savings open the door to many positive opportunities to combat the national debt. I will be obliged for your views. Kind regards, Dipak.

Dear Mr Murphy

Sir Terence Leahy CEO of Tesco in a speech today complained that “standards are still woefully low in too many schools.” and that “Employers [like Tescos] are often left to pick up the pieces.”

Of course if his company did not spend so much time avoiding tax through companies in Luxembourg. Switzerland and the Cayman Islands as so well documented on your website then there would be more funds available to help the country pay for the skilled workforce he needs.

When it comes to education every little bit of tax helps.

Dear Mr Murphy,

Is there any way of accessing information about which MEPs are most concerned with tax issues?

I enjoy your site very much, it is extremely interesting.

Thank you so much,

G

Richard,
Not sure if you are used to receiving fan mail from academia?
Just wished to say that the Touchstone report “The Missing Billions” was a superb resource for teaching undergraduates the background to tax avoidance.
Chris

Congrats on your Blair expose Guardian win! Love your blogs. You also seem to be the only man who has projected implications of recent IHT rules. Your example of Cayman Island family applies to so many friends I have who are Australian and New Zealand citizens. They have been running round world in great global jobs unaware that their entire estate is subject to Uk IHT even though they have maybe not have ever set foot there since infants or worse were even born in the Antipodes but their Papa was born in Uk.
Can give you lots of scenarios if you want to run with this. I suppose it is the flip side of the non-dom debate. ie that the UK can grab 40% of an estate which it has nothing to do with.
Example:
Joe is born in Scotland , his dad is English (so Domicile birth and origin). He emigrates with parents when he is 4 weeks old. All become Australian citizen ( although extended family all still in UK). Under Aussie laws has Aus domicile of choice because his principal place of abode is here. Joe is clever and does his B Comm and Masters and has a great job in investmant banking in Sydney. He rents rather than buys a house and invests and makes a personal windfall on the markets. He gets offered a job in Dublin……thinks that would be fun for five years say…

He will not be regarded as Irish domiciled which has advantages, but he will not be regarded as Australian domiciled while he is away either(as he will have no permanant place of abode while he is away).As he has to be domiciled somewhere his domicle of origin kicks in . If he pops it while skining somewhere his whole estate is subject to 40% IHT in UK.

Look forward to your comments. Think there is a great business opportunity to contact this particular expat community and put some protections in place as this does seem a bit inequitable. These kind of guys all come back to Aus in the end after all and pay thei income taxes in Europe so why is Uk government entitled to any of the non Uk capital?

Hi Richard,

Domicle of choice is only valid if a principal place of residence is retained in Australia . For many young expats they are not in a position to retain this when they work overseas, for financial or practical reasons. If they did retain PPR they would remain taxable on their world wide income whilst working overseas, negating the main incentive to work overseas in some pretty unpleasant places.

I agree minors are given parents domiclie of choice on parents citizenship/PR but thi sis not the issue here. The problem is it is still a D of C rather than D of origin (if child was Australian born and father Australian born). This is always at risk if D of C is relinquished.

If we take the scenario that Joe had arrived when he was 18 and then become an Australian citizen it is still a domicle of choice but the domicle of origin still relies on the nationality of the father, in this case English.

All is fine until he accepts a job overseas say 2 x 3 year contracts, one in Hong Kong, one in Ireland. He will be officially regarded by Australian Tax Office as non resident and non domicled 2 years after leaving Australia( although effectively from the date of permanant departure). This in my understanding triggers the domicle of origin (in this example UK ). As it is not likley that any alternative domicle could be established in the time frame, he would be exposed to UK Tax in event of his death.

m

M
I’m with Richard on this one. The only way that the guy in your example would lose his Australian domicile of choice for UK tax purposes would be if he has made a clear decision to permanently abandon his Australian domicile of choice. Going overseas (from Australia) for a few years to work is unlikely to be a permanent abandonment of the domicile of choice. Whether Australia considers him to be domiciled or resident in Australia whilst working abroad it not relevant to the UK domicile status.

I absolutely agree with Richard and Rupert on this one. There is no way that travelling overseas for a few years would be sufficient to amount to a change of domicile under Australian law. The Errol Flynn case shows how difficult it is to indicate an intention to change domicile for the purpose of Australian law. Richard is correct that your confusing whether he is a resident for tax purposes under Australian law with whether he his domicile is Australia. For example, I am not an Australian tax resident as my permanent place of abode is China. However, it is extremely unlikely that, in living in China for two years, Australia is no longer my domicile.

Richard also rightly points out that the issue is determined by UK law, not Australian law.

Richard,

You may be interesed in the latest attempt by the Chinese tax authorities to prevent avoidance through the use of off-shore vehicles. I have discussed this on my blog - http://chinataxinsights.com/?p=485.

Such developments seem to be consistent with your worthy mission here.

Matthew

Richard
What facts are you in possession of that allow to make such statements about the HMRC v Huitson ruling?

Are you familiar with the tax laws relating to this specific arrangement or are you generalising?

The Internet is a wonderful medium, but should be treated with respect by people in a position of influence.

Good response,
But surely if a tax arrangement or opportunities that was legitimate at the point of signing up (regardless of the morality of it) presented themselves, then it would be sensible for any individual looking to optimise their tax planning arrangements to participate. HMRC should have closed the door immediately upon discovering it, rather than procrastinating for 7 or so years then doing a clean up exercise in BN66. Individuals involved should now challenge they should be able to retrospectively resubmit their SA90’s in “more tax efficient manner” as they may have been using prior to Montpelier

Would that comply with principles (genuine question, Not being smarmy)

One Day Richard.. one day!

Then again..If the queen had balls she’d be the king.

Just heard you get torn a new one on Radio2.

I have never heard such a complete load of nonsense. Your argument was utterly pathetic. . .we should borrow more to keep people in non-jobs as this creates wealth.

That does not create wealth and you sir, are a fool.

“But poll dancing is a ‘real job’ is it?”

Well Richard, your spelling certainly proves you spend more time thinking about politics than you do about pornography. Well done!