If you didn’t know, these are some of the methods used by rich and famous people/corporations:

They Take Advantage of their Offshore Accounts

Did you know that Mohammad al Fayed relies heavily on his non UK domiciled status? Were you born overseas? Although it may be tough to legally set this up, you can typically avoid paying any tax on overseas generated income including your capital gains; however, you have to make sure that your income is generated wherever your offshore accounts are in order to avoid the legal penalties of where you are. I would highly recommend reading about offshore account taxes relevant to your location now and where you plan to be making your money.

Juice the potential of your spouse’s offshore status.

If you’re married to a hot foreign lady, you can take advantage of her offshore status wherein her/his banking would be located. Through the use of that offshore bank, you can channel earnings there and avoid paying the taxes determined by your current residence. This income you generate will be subjected to the regulations of that country, so if you’re in a country with potentially less taxes then your chances of reducing your taxes are greater. You can channel your earnings to your domestic accounts.

Being Tax Efficient with a Holding Company

Did you know that the famous group U2 have moved their band to a country that has less taxes? Read this:

We wanted to raise our concern that while Bono has championed the cause of fighting poverty and injustice in the impoverished world, the fact is that his band has moved part of its business to a tax shelter,” DDCI’s Nessa Ni Chasaide told ITN. “Tax avoidance and tax evasion costs the impoverished world at least $160m (£142.5m) every year. This is money urgently required to bring people out of poverty (The Guardian UK)

You see, U2, for example, used to pay the Irish tax regime which benefited the group because of his tax exemption, but when this was restricted and taken away, he moved their band’s income to another offshore holding company in Netherlands to wallow in the happiness of tax free loyalties. If you think about it, it’s pretty ingenious, that you can do it yourself by looking for excellent tax holding companies in Spain, Cyprus and maybe even Denmark.

The Benefits of Using Tax Efficient Trading Companies

Coca Cola uses so many offshore accounts with their plants to further its income growth, in fact, it’s not yet known how many Coca Cola actually has; however, they are given the advantage of redistributing their earnings to their CEO and other plants to ensure greater growth and reduce the rate of corporate tax. They even hire specialized tax lawyers to find loopholes in the legal system to further their corporation’s reduced tax goals.

Venezuela’s tax authorities have ordered a 48-hour closure of Coca Cola’s bottling plants for allegedly not following tax rules (BBC News)

Even James Blunt, Boris Becker, and Michael Schumacher have taken advantage of offshore accounts because they don’t feel like they could benefit by paying any taxes in the UK. Some may have actually moved permanently and are local residents of countries like Switzerland, to take advantage of Swiss tax benefits. They don’t really have to pay much in Switzerland compared to what they earn, that’s the appeal for moving to offshore accounts.

So are you looking to do the same? It’s been done before and it’s proven very effective in stabilizing income growth, so if you’re interested, I suggest you move offshore to benefit like the rich and famous.