A captive insurance company is where a parent group creates its own licensed insurance company to provide coverage for itself. The benefits of this include reduced costs, ability to insure difficult risks, direct access to reinsurance markets, and increased cash flow. In addition, when a company creates a captive they are indirectly able to evaluate…
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This strategy involves selling your business and paying no tax. This strategy only applies to businesses that pass either the $2 million turnover test or the $6 million net assets test. The three tax strategies that can achieve this are listed in the order of their attractiveness: 15 Year Small Business CGT Exemption. Retirement Exemption…
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A bachelor tax is a tax imposed on bachelors. The historical motives for imposing a bachelor tax have varied greatly from encouraging marriage, encouraging population growth, penalising delinquent and irresponsible bachelors, to simply raising government revenue. As Oscar Wilde (Irish Novelist and Poet, 1854-1900) said, ‘Rich bachelors should be heavily taxed. It is…
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There is no universal or legal definition of foundation. A foundation can be a trust, company, or other entity; and be either not for profit, or for profit. A foundation can be established under a will, by an individual, family, company or the community. Liechtenstein is one of the few countries which allows a private…
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Switzerland was the first ‘true’ tax haven and became a tax haven immediately following World War I. As Switzerland remained neutral during the Great War they could maintain a low level of taxes as they didn’t have the high infrastructure costs other countries had. In contrast, many European governments raised taxes sharply to help pay…
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A self-managed super fund (SMSF) is an Australian trust structure that is used by members to personally manage their retirement savings. SMSFs are established for the sole purpose of providing financial benefits to its beneficiaries in retirement, with the benefits passing to the deceased’s beneficiaries on death. The first SMSFs were established in 1915 to…
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The General Corporation Law (Title 8, Chapter 1 of the Delaware Code) is the statute governing corporate law in the U.S. state of Delaware. It has been the most important jurisdiction in United States corporate law since 10th March 1899 when it enacted corporate-friendly laws to attract businesses from…
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Trust cloning involves setting up a trust (the ‘cloned trust’) with the same terms and beneficiaries of another trust (the ‘original trust’). Assets may then be transferred from the original trust to the cloned trust. The advantages of trust cloning are: Asset protection – allows a trust carrying on a business to separate the business…
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In 1797 Great Britain introduced a farm horse tax on horses and mules that were used in husbandry or trade. The tax was levied at the rate of 2s per horse or mule. The tax collectors visited the farms to audit the farmers and ensure they were paying the…
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The Duties on Clocks and Watches Act 1797 was an Act passed by the Parliament of Great Britain instituting a tax on clocks and watches. The tax was introduced by the Prime Minister William Pitt and was assessed at the annual rate of two shillings and sixpence for a basic watch, five shillings for a…
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"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2