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“Wealth Management” / Tax Dodging 101

24/01/2011 2 comments

So I have managed to get my hands on an interesting letter from a firm in London which specialises in the “wealth management” of financially comfortable people.

The letter is an invitation to a seminar on how to consolidate capital and lose none of your wealth to the already lenient and sloppy British tax system. Now, the letter bothered me not only because of the nature of the event, but how the company lauded itself as something recognisably mainstream. It may well – I wouldn’t know – but is that even right?

Naively, I was unaware that such companies operated on this kind of level. The recipient of the letter is hardly what I would call well-off, so it was surprising to see how low the bar was on the matter of income. If the country were deprived of the tax generated by those on middle as well as higher incomes, public services would turn into a privatised mess.

Here is the letter:

 

WealthManagement1

 

The key points of the seminar are the ones I have highlighted in the blood of the poor, and are worth repeating.

 

How to increase your income from your investments in spite of very low interest rates.

A completely legal strategy for paying no tax on your income and protecting your capital from taxation.

Mitigating Income Tax, Capital Gains Tax, and Inheritance Tax without losing control of your capital.

An overview of the current financial environment and the view ahead for 2011.

 

It has to be said, the first point was a large component of the recent financial crisis.

The second and third points are what have inspired widespread public anger not only amongst grassroots networks such as UKUncut, but normal people around the country.

And the fourth will likely be a baseless assessment of the economy, built on flawed assumptions and an blinkered view of growth and prosperity from the company’s self-interested sales perspective.

This isn’t happening in some far away tax haven either – this is happening under our noses, in buildings we walk passed every day filled with normal people. To add to this, such companies are authorised and regulated by the Financial Services Authority (FSA). The problem is more than the greed of a few top businessmen – it is a culture which is plainly accepted.

The company markets its investment “products” as tax avoidance, which is how the small guy can play the money game. Again, this was a large part of the last financial crisis, and will likely precipitate another one in the not too distant future.

 

failboatBecause the gravy train inevitably turns into a… failboat.

 

In order to win the argument that tax “avoidance” is wrong given the true necessity of preserving public goods such as health and education, we have to acknowledge that many normal people exacerbate the problem, not just multi-millionaires like Philip Green and the Arcadia Group.

So Neil Taylor, your company St James’ Place may have been nominated the best tax dodging strategists in three recent years by the Daily Telegraph (yes, there was actually an award for it issued by a daily national), you will not win the wider argument in the long term. This is boom and bust with a suit and tie.

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