Tax havens lose some attraction as Revenue goes on the offensive
Monaco Millionaires — the elite group of business people who reside outside the UK to slash their tax bill — face a crackdown by Revenue & Customs on the number of days they can spend in Britain, after a surprise legal decision. Accountants accused HM Revenue & Customs (HMRC) of introducing a stealth tax on the wealthy after it ignored its own guidelines to pursue a case against Robert Gaines-Cooper, a Seychelles-based multimillionaire. Mike Warburton, a senior tax partner at Grant Thornton, said: “The present Government doesn’t like people getting out of tax by moving offshore so they keep moving the goalposts and changing the rules by the back door. There are going to be a lot of people who are significantly shaken by this decision.” Some of Britain’s most successful entrepreneurs live in offshore havens such as Monaco, the Isle of Man, Jersey and Switzerland to avoid paying income and capital gains tax on UK dividends and assets. Tina Green, the wife of Sir Philip Green, the owner of the Arcadia Group of high street shops, has been a resident in Monaco since 1998, which meant that the £1.2 billion dividend that she received from Arcadia last year escaped the clutches of the taxman. Laurence Graff, the British-born owner of Graff Diamonds International, lives in Switzerland, while the Barclay brothers are based on the island of Brecqhou, off Sark. According to HMRC’s guidance note IR20, people who wish to be considered non- resident must not spend more than 183 days in any single year in the UK. Over four years, the average number of days per year must not exceed 90. Since 1993 the HMRC has discounted the days of arrival and departure from the total.