Expat Tax Saving Guide

There’s a story doing the rounds about a French software engineer called Hervé Falciani who has apparently stolen banking records from HSBC’s private bank in Switzerland.  The alleged ‘offence’ took place three years ago, but the man in question has been taking his time in selling the information on to the likes of HMRC because of facing prosecution in Switzerland.

He has avoided prosecution by moving to the South of France, and is being hailed by some as a modern day Robin Hood.  However, the man is certainly benefitting substantially from his crime in the form of cash paid for data stolen – and so he has not stolen the records for the good of anyone’s health other than his own.

According to the Times, HMRC is about to get its hands on records relating to British customers who hold accounts at HSBC in Switzerland – and I doubt that they are acquiring them for nothing from Hervé Falciani.  So, what does this tell us?  Well, on the one hand, if you’ve been using a private bank account with HSBC in Switzerland to evade taxation you need to be worried – and on the other hand it tells us that our government says that theft is a lesser crime than tax evasion.  Personally I find that very, very hard to stomach…

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Have you heard the one about the British peer who claims to be non-domiciled in the UK?  Not ‘non-resident for tax purposes,’ but apparently ‘not domiciled in the UK?’  We’re talking about Lord Ashcroft, the deputy chairman of Britain’s conservative party who also has a seat in the influential House of Lords – yet who apparently doesn’t have to pay UK tax on his alleged billions of offshore pounds.  Wow, what a story!

In fact, it’s a story that must make Robert Gaines-Cooper weep.  Mr. Gaines-Cooper recently lost his appeal against the HMRC ruling that he was UK domiciled because of the extent of his personal ties with Great Britain, and therefore he was subject to UK tax on his worldwide assets and income.  Yet Mr. Gaines-Cooper certainly didn’t live in the UK, have a seat in the House of Lords nor hold a peerage, seemingly wholly unlike Lord Ashcroft.  But then again, Mr. Gaines-Cooper wasn’t a huge donor for the conservative party – or the labour party, or any other political party for that matter.  So, that was probably where he went wrong and why he lost his case…

Indeed, it seems you can be proud to be a British peer like Lord Ashcroft and Lord Paul, (another peer allegedly up to the same tax avoidance ‘tricks,’ but this time a labour supporter) – but you can’t make these over privileged people pay tax like the rest of us because they can bend, flaut and even invent the rules to suit themselves.  Does it make you proud to be British and happy to remain in the UK, pouring more and more of your income in the form of tax into the void that is the budget deficit, when you know there are others out there who have massive influence over the direction of this country but who refuse to contribute fairly to it in the form of tax?

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The failure of the appeal of Robert Gaines-Cooper in his case against the British taxman, as he fought to prove he was non-resident in the UK and therefore not liable to UK income tax on his many millions, has made headlines – and created some confusion.

A lead article in the Money section of this week’s Sunday Times for example would have us all believe that HMRC has got it in for all expats, and that we’re headed the same way as America where Americans are basically ‘owned’ by the IRS even if they emigrate to live on the moon!

It’s a case of here we go again, apparently and allegedly the British government is going to launch a tax crackdown on expats who’re resident abroad and claiming non-residency and not-ordinary resident status in the UK to ‘legitimately avoid’ tax.  But in all honesty, nothing has changed…here we explain the rules and why the Robert Gaines-Cooper case allegedly and apparently flauted them.

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