| 13 February 2011
My old aunt Gloria died a few weeks ago in Menton, where she had an apartment
for the last twenty years of her life. We had been very close since I was a
child, and it was very upsetting, although she knew it was coming and didn't
seem that bothered. I went over for the funeral, and afterwards there was a
scene in a notary's office, just like something out of a French version of Dickens,
when we heard what she had left us. Gloria wasn't mega-rich, but she wasn't
particularly poor, either. Tell the truth, I wasn't really expecting anything
much, because she had children with their own families, who are much more deserving
than me. I would have been more than happy with a ring or two and perhaps one
of the family pictures off her dining-room wall. Well, I got those (she had
already told me, even asked me which ones I wanted), but I was gob-smacked to
get a lot of euros as well in a bank account in Monaco, 'as a token of my appreciation
for her friendship over so many years', said the will. In French, of course.
It's true I had visited Gloria several times a year for longer than I can remember,
but I did it because she was good fun.
Anyway, here I am with more euros in one place than I ever expected to see,
and wondering what to do with it. Have lunch, is the answer, of course, as usual,
and in this case with Jeremy, who knows everything about everything. We met
up in Paris on my way back to London and ate at Maxim's. It never palls and
the food just seems to get better and better. The maitre d knows Jeremy of course,
and even pretended to remember me, so we had that fantastic table in the window.
Eat your heart out, world!
I pay my taxes in the UK, and I am even truthful about the income I get from
investments in Switzerland and Canada; but like a lot of other people in the
UK I am really beginning to wonder. I'm a writer, and writers can write anywhere,
right? What am I doing slaving away in the cold and drizzle just to pay off
Gordon Brown's debts? My partner, Jack, retired not long ago; he has a small
yacht at Bosham, and keeps nagging me to join him on a Mediterranean cruise.
We do enjoy being on the yacht together, it's a fact.
Jeremy, on the other hand, doesn't seem to live anywhere. He has places to
live, yes: I know about a flat in Cyprus, a house in New Zealand and a boat,
and there may be others. "So do you pay tax, Jeremy?" I asked him
quite brazenly after the first couple of drinks (vintage Moet: the ordinary
stuff is a bit thin and sharp for my taste but go back ten years and it's one
of the best).
"I try to," said Jeremy, laughing, "but when you live as I do
it's quite difficult."
"What do you mean?" I persisted, "I'm seriously thinking about
leaving England and I really need to know how to organize myself."
"I didn't plan it this way," he said more seriously, "it just
happened as a result of the projects I get involved in all over the world. Take
Cyprus, for instance: I was there for four or five years and I did fulfil the
criteria for residence. I went to an accountant and asked him to register me
for tax. He was a very up-market figure, knew the President and the Chairman
of the Central Bank, all that. He looked at me funny and said: 'What do you
want to do that for?' Anyway I made him agree to get on with it and we filled
in a form together. About a year later - I had forgotten all about it, actually
- I met him in the street and asked him how it was going. 'Oh,' he said, 'yes,
sorry, I must get on with it.' Anyway, after three years of that he did go to
the tax authority and they said I had to be officially resident before they
could take money from me. I was already about to leave Cyprus, so I gave up."
"And what about the yacht?" I asked, "How does that figure?"
I know that Jeremy spends about half the year swanning about the Mediterranean
in his yacht, and sometimes has a crew sail it to New Zealand or the Caribbean.
I can't imagine that for myself, but I could stretch to a small yacht in the
Med, especially if I sell my flat in London.
"When you're on the yacht," explained Jeremy patiently, "you
aren't anywhere, from a tax point of view. Obviously if you moor in Chichester
and live on your boat all the time, you're resident in the UK, so you've won
nothing. But if you sail around the place, not spending long in any one marina,
you have to pay fees of course, but tax isn't on the agenda. I tend to sail
to places where I've got money, so that I can sit down with the manager over
a coffee. Everything is so much easier that way. There are rules, of course,
but when you're there in person they just don't seem to matter as much."
"And where is that, then?" asked I, imagining he was going to say
Monaco or Nassau.
"Cyprus," he said, surprisingly. "There are good marinas, not
too expensive, and they speak English. Dubai; there's no tax anyway and it's
the most cosmopolitan place in the world. Hong Kong, although it's a bit hard
to get to, and I do tend to fly there from New Zealand. Vanuatu: that's a really
laid back place. Nevis; they're trying really hard to climb into the big-time
and you can get fantastic deals. I'm thinking about getting a passport there."
"Oh," I said, nonplussed.
"You need practical advice, then," said Jeremy after I had explained
my problemette and the number of noughts involved. "You can easily afford
the Mediterranean yacht idea, and you could have a flat in Cyprus and another
in Dubai. Actually it's a really good time to buy, especially in Dubai. Or you
could rent; it's really cheap at the moment. But whatever you do, get the money
out of euros and preferably out of Europe. Dollars are no good, either. You
may get a good interest rate, but all these currencies are just going to go
down the tubes."
I looked at him questioningly.
"It's the debt," he said, "they're all bankrupt. The euro-zone,
the UK, America."
"But Cyprus is in the euro-zone?" I ventured.
"You can have a Swiss Franc account anywhere," he said, a bit patronisingly.
"Or even a renminbi account nowadays, especially in Hong Kong. And you
don't have to keep the money in cash; there are plenty of investment funds denominated
in safe currencies as well. Cyprus still has a quite non-European attitude to
things. You'll see. It's not like the Channel Islands or Luxembourg, with the
regulators crawling all over you."
Jeremy could see I was biting. "Why don't you come to Dubai next month?
Bring Jack with you. I'll take you to see some of my advisers. Believe me, you
won't regret it."
The warm glow of Maxim's and Jeremy's enthusiasm lasted me all the way back
to St Pancras International, and in the taxi going home to Chelsea, with sleet
lashing at the windows I started to plan.
"Now then, Jack, about that cruise . . . "
You have been reading an entry on the following blog:
Penelope Wise
Penny Wise but not Pound Foolish! But remember: I am not offering investment advice. My comments are just for your general information; I do not recommend investments, and you should take professional advice before entering any investment contract.
Penelope blogs on investment and financial services around the world: mainstream and alternative. Contact: penny@lowtax.net
|
Lowtax Network Portal
Front Page
Tax Jurisdictions
Featured Content
