Tax exile

From Wikipedia, the free encyclopedia

A tax exile is one who chooses to leave a country and instead to reside in a foreign nation or jurisdiction because personal taxes there are appreciably lower or even nil. Going into tax exile is a means of tax mitigation or avoidance.

1 Legal status
- 1.1 UK rules
- 1.2 USA rules
2 Famous tax exiles
3 See also
4 References

[edit] Legal status

In most countries one becomes liable to be taxed in that country if one is resident there. For taxation purposes residence is often defined as spending 6 months (or some other length of time) in any one year in the country, and/or having an abiding attachment to the country, such as fixed property.

[edit] UK rules

Under UK law a person is "tax resident" if that person visits the country for 183 days or more in the tax year or for 91 days or more on average in any four consecutive tax years.[1]

[edit] USA rules

A US citizen continues to be taxable in the USA no matter where in the world he lives. A foreigner becomes liable for US taxes if he spends more than 122 days in the year in the United States.

[edit] Famous tax exiles

Sean Connery and Shakira living in the Bahamas
David Coulthard, Jenson Button, Roger Moore, Ringo Starr, Wafic Said and Ken Bates in Monaco
Peter Ebdon living in the United Arab Emirates
Stelios Haji-Ioannou who was quoted in the Guardian: Sir Stelios is quoted as saying: "I have no UK income to be taxed in the UK." Source: David Leigh, Monday, July 10, 2006, The Guardian.
Mick Jagger (and at one point in the early 1970s, the rest of the Rolling Stones as well)
Michael Schumacher, Phil Collins, Boris Becker, Tina Turner and Ingvar Kamprad living in Switzerland
Ralf Schumacher living in Austria
Ozzy Ozbourne living in Florida
Tony Ryan living in Monte Carlo
Freddie Mercury
Pat Rafter, living in Bermuda
K. C. Irving owner of most media in the Canadian province of New Brunswick (lived in Bermuda from the 1970's until his death in the 1990s. Willed his empire to his sons on the condition that they become non-residents of Canada for tax avoidance).
The Spice Girls, who spent enough time away from the UK during their Spiceworld Tour to mean they were tax exempt, reportedly saving them over £1m each.