Significant assets (anything over say, 10k in value) should probably be owned by a trust, corporation, or anonymous offshore LLC or foundation. (Escalating by value). The cost of doing this runs about 300-1000-3000 a year.
(complex, basically impenetrable systems that also can effectively shelter large sums of money and eliminate huge swaths of tax liability usually cost around 5-10k a year or so to maintain),
These systems of ownership/control protects these assets from risks such as personal or business liability, divorce court, bankruptcy, etc and at the more sophisticated levels can create cash sinks to eliminate vast swaths of tax exposure while tucking cash and other fungibles away in effectively untouchable zero-tax jurisdictions.
This is a system quietly utilised by virtually every international corporation as well as the vast majority of people with significant wealth. It is gravely underutilised by people of modest wealth. A trust provides very strong protection for multiple assets for less than 30 euros a month in many cases.
It’s worth noting the obvious, that one entity can hold many assets so that the cost is spread over your entire risk position.
You should speak to a financial advisor and also look into ways to charge off surplus cash reserves offshore if possible, though it’s possibly too late to do this in an ideal way to reduce your tax exposure.
The goal for fungibles is to move your profit centres offshore to better tax jurisdictions, and although this sounds complex, it’s not really that difficult.
An offshore can hold your IP, and your local can lease that IP from the offshore, absorbing the majority of your revenue, for example. Or you can set up a private insurance company so that all insurance costs go offshore. Offshore private retirement funds are a thing.
Offshore companies can hold assets that you then lease from them, such as real estate, vehicles, boats, planes, etc. They can be very profitable, tucking those profits away in tax-favourable jurisdictions while absorbing large chunks of discretionary revenue from your operations in less tax-favorable situations.
All of these can have tax advantages for avoiding taxes you don’t need to owe, and most of them create very very deep legal moats around the assets that you seek to benefit from.
The mechanisms for relinquishing legal ownership and direct control (therefore liability and vulnerability) while retaining the use and benefit from your assets are sophisticated and well established.
This is all very bad for our society. But maybe I do agree with you that more people of modest wealth should take advantage of it. This would make the problem more visible, and thus more likely to be fixed.
There are a lot of things that people do in society which I've declined to do as well because I feel that they're wrong but I've come to realize the way to make people stop doing those things is to just do them in a really oafish way so that the public sees how bad they are and hopefully they'll fix it.
How far you go down the road of using structures for tax avoidance is up to you.
However it should be noted that the use of on-shore trusts to separate assets from risks and liabilities does not intrinsically have either a tax-saving goal, or a tax-saving effect (depending on your jurisdiction.)
Personally I make use of asset-protection structures, but in an on-shore context. I live here, I enjoy benefits here, and I'm happy to pay my share of taxes here.
My point is that offshore trust structures, and onshore trust structures (among other options) have very different use cases, tax implications, and costs. Use of one does not imply use of the other.
Definitely. I certainly did not mean to conflate tax avoidance and asset protection, even though in some cases they go hand in hand. I apologise if I was confusing in my explanation.
(complex, basically impenetrable systems that also can effectively shelter large sums of money and eliminate huge swaths of tax liability usually cost around 5-10k a year or so to maintain),
These systems of ownership/control protects these assets from risks such as personal or business liability, divorce court, bankruptcy, etc and at the more sophisticated levels can create cash sinks to eliminate vast swaths of tax exposure while tucking cash and other fungibles away in effectively untouchable zero-tax jurisdictions.
This is a system quietly utilised by virtually every international corporation as well as the vast majority of people with significant wealth. It is gravely underutilised by people of modest wealth. A trust provides very strong protection for multiple assets for less than 30 euros a month in many cases.
It’s worth noting the obvious, that one entity can hold many assets so that the cost is spread over your entire risk position.
You should speak to a financial advisor and also look into ways to charge off surplus cash reserves offshore if possible, though it’s possibly too late to do this in an ideal way to reduce your tax exposure.
The goal for fungibles is to move your profit centres offshore to better tax jurisdictions, and although this sounds complex, it’s not really that difficult.
An offshore can hold your IP, and your local can lease that IP from the offshore, absorbing the majority of your revenue, for example. Or you can set up a private insurance company so that all insurance costs go offshore. Offshore private retirement funds are a thing.
Offshore companies can hold assets that you then lease from them, such as real estate, vehicles, boats, planes, etc. They can be very profitable, tucking those profits away in tax-favourable jurisdictions while absorbing large chunks of discretionary revenue from your operations in less tax-favorable situations.
All of these can have tax advantages for avoiding taxes you don’t need to owe, and most of them create very very deep legal moats around the assets that you seek to benefit from.
The mechanisms for relinquishing legal ownership and direct control (therefore liability and vulnerability) while retaining the use and benefit from your assets are sophisticated and well established.