House Prices "Heavily Undervalued" says Times article

WellKnownSid

6. Loughton Monkey Offshore Tax Haven Caymen Islands Ltd provides you with a company charge card for 'legitimate business purchases'. Under Caymen Island rules this includes anything, thereby allowing you to bring your acquired wealth back onshore without any tax implications.

chewmylegoff

Loughton_Monkey wrote: »

Then probably accountants are mugs.

How would it work, therefore, if the following happens:

1. Loughton Monkey Property Ltd. buys a plot of building land, cheap, at £1 million when the prices are low.

2. A few years later, the market picks up. Not only is the land worth £2 million (market values), I reckon I can spend another £1 million building houses and sell the whole shooting match for £3 million. So I make £1 million profit.

3. So seeing this coming, before I build, I sell the land to Loughton Monkey Offshore Tax Haven Caymen Islands Ltd. for £1 million, and buy it back for £2 million and then build the houses.

4. Whoops! I've bought land, built houses, and sold them, and washed my face. Zero profit. Zero tax.

5. Loughton Monkey Offshore Tax Haven Caymen Islands Ltd. Has made the £1 million profit tax free.


Large gin & tonics all round......

Well except that your Cayman Islands company has made a £1 million profit on UK trading activities which is therefore subject to UK corporation tax and you have managed to create two legal sales of the land subject to stamp duty at 5% so you'd have to pay £150,000 of additional tax over and above the amount payable on the profit (albeit you would get double taxation relief for corporation tax paid in the Cayman Islands - which is 0% I think...). No gin and tonics for you I'm afraid (unless you just don't bother declaring any of it to the tax man of course but then it will be rather difficult to get tax relief on the £2m cost of the land...).

Loughton_Monkey

chewmylegoff wrote: »

Well except that your Cayman Islands company has made a £1 million profit on UK trading activities which is therefore subject to UK corporation tax and you have managed to create two legal sales of the land subject to stamp duty at 5% so you'd have to pay £150,000 of additional tax over and above the amount payable on the profit (albeit you would get double taxation relief for corporation tax paid in the Cayman Islands - which is 0% I think...). No gin and tonics for you I'm afraid (unless you just don't bother declaring any of it to the tax man of course but then it will be rather difficult to get tax relief on the £2m cost of the land...).

Well I thought I might have been onto something....

Never mind. I'll take your official advice and not bother to declare it. My cheque will be in the post.

HMRC will never find out because they are too busy 'Naming and Shaming' Cowboy Tax Advisors.

http://www.bbc.co.uk/news/business-23664945

Clearly Loughton Monkey Property Ltd needs a rethink on its tax minimisation strategy. The really 'good' consultants don't advertise much, but they will doubtless welcome the free publicity offered by HMRC.

Loughton_Monkey

WellKnownSid wrote: »

6. Loughton Monkey Offshore Tax Haven Caymen Islands Ltd provides you with a company charge card for 'legitimate business purchases'. Under Caymen Island rules this includes anything, thereby allowing you to bring your acquired wealth back onshore without any tax implications.

This is all very well, but I was planning to buy a knighthood, or peerage [Lord Monkey of Loughton has a nice ring to it don't you think?] and although I've been quoted the going rate, the Conservative Party doesn't take credit cards.....