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using tax havens

Discussion in 'General Investing Discussion' started by Paymoretax, 15th Jun, 2011.

  1. Paymoretax

    Paymoretax New Member

    Joined:
    15th Jun, 2011
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    Location:
    sydney
    Can I delay the tax payable on income I (or my company or trust) makes in Australia by setting up a trust in a tax haven that receives the income.
    In other words, the ultimate owner of the income would be the tax haven trust until such time as the trust decides to pay me the money.
    This would enable me to delay paying tax on the income until it suited me. :confused:
     
  2. Terryw

    Terryw Well-Known Member

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    9th Jun, 2006
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    Location:
    Sydney

    Very complex. It would depend on the income and your willingness to lie to the ATO. Also will depend on the country you are paying to.

    Certain income has withholding tax on it. This will vary depending on the country being paid to.

    There would also be requirements to list all incomes in your tax return. I think there are questions about overseas incomes and having interests in overseas companies and trusts.

    If you are a huge business with an international aspect then it can be done legally.

    also look at project Wickenby at the ATO site.
     
  3. Paymoretax

    Paymoretax New Member

    Joined:
    15th Jun, 2011
    Posts:
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    Location:
    sydney
    Thanks for the reply Terry.
    I don't want to lie to the ATO ( well, I do, but I had better not).
    My thought was that this could be done because I am only a beneficiary of the trust.
    It would, therefore, be lawful for the trust to make the payment when it wanted.
    It would be a little bit similar to me invoicing a company on June 30 with a view to receiving the income on July 1 to delay the tax payable by a year. There would not be any avoidance, only a delay.
    I would be able to set up the trust arrangement I suggested in my first post with that foreign trusting being the owner of a new business from day 1.
    I appreciate your thoughts. I just got my bill - $5500 - from my accountant for doing last year's tax which is why I am being a bit cheap using this "free" service. It's also nice to get a variety of views.