How to avoid a hefty tax burden when you come into fortune

“Nothing in this world is certain, except death and taxes” (Benjamin Franklin). Although this statement is true, there are ways to lessen the amount of tax paid within a lifetime without breaking the law. This is called tax avoidance and is the legal arrangement of the taxpayer’s affairs in order to minimise their tax liability.

I am a 40 year old accountant, married, with two children and have become the fortuitous winner of this week’s £3million lottery jackpot. I jointly own a 3 bedroom house with my wife in the UK which we have lived in for 2 years has been valued at £250,000.

In this essay I will explore tax avoidance methods, ways of investing money and protecting it from the clutches of the taxman.

Offshore bank accounts are often believed to be illegal or immoral but this is far from the truth. An offshore account is simply an account held in any country outside the UK, preferably where the tax rates are lower then in the UK and tax will not automatically be deducted from interest paid on the account. There are many places where it is beneficial to open an offshore account, from the Channel Islands and Isle of Man to m

- Enterprise investment scheme (EIS)

I have decided to retire, and my family and myself have chosen to leave the UK and move to paradise. We will move to the Cayman Islands and jointly purchase a large house at a cost of approximately £1.25 million, this will become our main residence and we will therefore not have to pay capital gains tax if or when the property is sold. Our UK based property has become our second home, which means it will be subject to capital gains tax on its sale. As it is jointly owned with my wife, we will take advantage of the allowance of £7,900, which will double. Also, by waiting until at least the 3rd year of owning the property taper relief comes into affect which will reduce the percentage of capital gains tax charged on the gain of the sale of the property.

Some topics in this essay:
Cayman Islands, Property Capital, Wasting Asset, Benjamin Franklin, VCT VCTs, Trusts Tax, Inland Revenue, Banking Offshore, Lifetime Trusts, Trusts Loan, gains tax, capital gains, capital gains tax, exempt capital, exempt capital gains, offshore account, antiques art, wasting asset, cayman islands, inheritance tax, subject capital gains, offshore banking, gains tax sale, pay capital, uk residents living,