Privacy World - The WORLD'S SHREWDEST PRIVACY NEWSLETTER
Is Leaving So Hard?
Her Britannic Majesty's Secretary of State, inside a
British passport, requests and requires in the name of Her Majesty all those
whom it may concern to allow the bearer to pass freely without let or
hindrance. The United Nations Declaration of Rights says you can leave any
country whenever you want to. But have you ever tried to leave your native
country without a passport? And despite talk of freedom of movement within
Europe, I have to show my passport to enter England, where I was born, while
Spanish friends don't. Under European Union regulations, they just need
identity cards. (Admittedly not having an identity card is one advantage of
being British - but for how long?)
This authoritarian urge to control people's movements is
a fairly recent development, introduced at the same time as modern
"democracy" supposedly gave us more freedom. Centuries ago, traders
and skilled workers like stonemasons did roam Europe "without let or
hindrance." Even when you have physically left, "your"
government may insist that you haven't really. Your absence is seen as a
temporary aberration. You will soon come to your senses and return. So even
though you have removed your assets from the clutches of "your"
tax officials, and now earn your living elsewhere, they
still claim the right to pry into your private affairs.
The United States, land of the free, is the least willing
to let you escape. Unless you renounce American citizenship you stay on U.S.
tax records forever. The Internal revenue service considers you should file tax
returns indefinitely, in whatever corner of the world you live and earn your
money. Worse with the recent FATCA laws that became effective January 1st,
23013, obtaining or keeping an offshore bank account for Americans is
enormously difficult.
The Spanish Parliament has passed an "EXPAT
Tax" to tax its citizens on their worldwide income for 5 years after
departing their motherland!
Britain insists that you mustn't spend any significant
time in the U.K., for several years before you qualify as a tax exile, only
returning for short holidays. If you spend even slightly more than half the
year in the U.K., you are definitely considered a resident, and liable for tax.
Just having a house available to stay in can make you a resident to the taxman
- even if you never visit Britain. Having a mainland British bank or building
society account or credit card means you haven't cut your links to the
satisfaction of the tax inspector. You can be "deemed to be resident in
both countries at the same time." This amazing bit of official doublethink
is taken from a booklet on double taxation relief issued by the Inland Revenue.
Germany insists its citizens continue to pay tax unless
they can prove they pay tax at exorbitant rates elsewhere. Denmark fines you
several years' tax if you move to another country not on its approved list
(most aren't), and Sweden has an immigration tax.
What is the solution?
Instead of becoming a resident in a high-tax country, or
in two countries at the same time, you should plan ahead to live nowhere.
Living nowhere means not having any significant financial or banking records
available in the countries where you live, work and play.
The first stage could be an account with a reputable bank
in one of Britain's offshore tax havens: The Isle of Man, the Channel Islands
or Gibraltar. You will find adverts in magazines like "Resident
Abroad" and upmarket financial publications. (But if you live in Britain,
be wary of banks which keep records in mainland
Britain,) often you can open an account by post, if
you're careful not to leave a paper trail. If you're on holiday, always look
out in airports, hotels and bars for free publications aimed at Expats and
business people such as "Europa Times," published in Brussels, but
available throughout Europe. In the south of Spain you will find "The
Reporter," "The Entertainer," and "Sur in English."
Study the adverts, then go on a day trip to Gibraltar. From the north of Spain
or the south of France, the independent tax haven of Andorra can be reached in
a day, although you would probably want to stop overnight. Further north, visit
Luxembourg, perhaps Switzerland or preferably its tiny mountain neighbour
Liechtenstein, where you may not even have to leave any address in the bank's
computer's - just care of the bank. Mail is then sent if you request it.
U.S. residents have a host of Caribbean tax havens like
the Cayman Islands and the Bahamas to choose from, between them holding more
funds than all the American banking system. But the danger is that some of them
keep records in computer networks in the USA. Remember, in itself having an
offshore bank account is not a criminal offence. If it were, would the British
government tolerate branches of high street bank's such as NatWest and the
Royal bank of Scotland in jersey or Gibraltar? You are only breaking the law if
you use one of these accounts illegally.
The second stage is to obtain a second passport, which
offers good visa free travel. A lot of high-tax countries have altered their
tax legislation to catch wealthy citizens out and ensnare them in their fiscal
net. But with more than one nationality you can reduce or even eliminate your
taxes. Even most high-tax countries exempt foreigners who live there less than
six months a year. Obtain a second passport and you could live in a high-tax
country nearly half the year and remain tax-free as a foreigner.
A second citizenship can also put you in a position to:
* Invest in offshore unit trusts or mutual funds.
* Buy and rent out property wherever you choose without
punitive taxation.
* Avoid electronic logging of your existing passport
* Take greater advantage of offshore business
opportunities.
* Obtain employment world-wide.
* Travel and live free of bureaucratic meddling in a
great deal freer life style with more anonymity and privacy
The very fact that a second passport opens up the
additional options already mentioned is actually reason enough to obtain one,
but in case you need a little more convincing.
"Your" passport is in fact the property of
"your" Government, which claims, and increasingly exercises, the
right to confiscate it at any time. Even if you have sensibly removed the bulk
of your assets to an offshore haven, they are no good to you there if you are
trapped in your "home" country because your passport is no longer
valid or has been confiscated. Most countries have laws, which allow them to
restrict not only entry but also exit from their territory. Exchange controls
can be imposed overnight - the necessary legislation is already in place in the
US and many other countries. U.S. citizens are subject to tax wherever they
work and live in the world. But a second passport can eliminate the need for
disclosing income and assets.
If your citizenship demands fulfillment of military
service contrary to your beliefs, it would pay you to have dual citizenship. If
your passport allows your government to supervise your movements, monitor or
control your travel in any way, or restricts your liberty to invest, borrow, or
participate in any currency transactions, you are at a disadvantage. If you are
not a citizen of a member state of the European Union, freedom of movement
within the EU may not be an option open to you as there are now much tougher
controls on non-EU nationals.
The answer to this problem could be obtaining citizenship
of a country which is either already, or likely in the future to be admitted
as, a member of the Union. Alternatively obtain a 3rd world document and use
that for legal residency within the European Union and then obtain nationality
and an EU passport via naturalization after a few year.
If you wish to keep a low profile, for reasons of
nationality, religion, race and or sexual orientation, etc., a second passport can give you the
necessary mobility you require. It could even save your life. As an Insurance
policy against future economic instability, political strife or war, you should
think about a second or third passport.
When catastrophe is imminent you've left it too late. A
second passport in these circumstances would be worth its weight in diamonds.
The above article is by Professor Charles Joughin.
Until next issue, stay cool and remain low profile!
Privacy World
PS - Interested in a no hassles second passport with excellent
visa free travel throughout most of the world and a potential name change?
Email and place "Hassle-Free-PP" in your email subject heading for
full details and information.
--
Best regards,
Privacy mailto:privacy@privacyworld.com
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