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If you Escape as a Tax Exile, make sure you Really Escape!
In February 2010 the Financial Times printed articles about a notable court case where someone who thought he had escaped the UK and become a Tax Exile was somehow found to have not properly escaped and so was ordered to pay a huge amount of tax to a country he no longer lived in.
Now admittedly he had stuck by the letter of the law in terms of what is required to be a tax exile and not resident for tax purposes. However, the government of the UK had become increasingly desperate because they'd ruined the economy, and so they resorted to what seems like cheating: Changing the rules, moving the goalposts, and having arbitrary court decisions made in their favour. Usually the UK does not stoop so low as to have arbitrary guesswork laws like the old "suss law", and the UK is theoretically supposed to have "The Rule of Law" which means that the laws are there to be seen and if you keep to what the laws say then you are safe from persecution. The UK isn't known as a dodgy place like Belize where the police can steal from you if they feel like it, and where corruption is endemic.
The recent (2010) rulings really make the UK look decidedly untrustworthy, and as well as the Vote of No Confidence in the UK as per Squeak Splosh, we are now putting up some helpful advice for tax exiles wishing to sleep better in their tax haven escape locations. The idea is, if you want to escape from the UK tax system, make sure you Escape Properly.
It's no good leaving on paper and setting up home in a tax haven and only visiting the UK on rare occasions and hoping that the total number of days visited is fewer than the official quota. You have to leave and never come back! This means that the UK will never see you or your money again.
If you have a family, it's best if you can take them with you and set up home in the new country. Sell off all property in the UK, and don't run companies that are still UK-based. Internet companies are International companies and can have a base anywhere you like. You are allowed to trade with the UK, and you can subcontract business and have a proper financial arrangement, but you have to be sure that your social life has escaped! In the court ruling, it was decided that the victim of the tax persecution had a "centre of gravity" of his social life still in the UK. So, this is something to be avoided!
Interesting to note that It's Not Fair, and the government of the UK are making up the rules as they go along. This discredits a place that previously had some integrity and respect. The fact is, people are not the property of Her Majesty's Government. You have a human right to be able to escape the Slavery and Domicile of the UK and no longer have anything to do with it.
Many tax haven countries welcome rich people! Rich people, even if they don't pay tax, are a great benefit to the local economy, as they employ local people and they buy stuff, and they improve the status of the country. In many of the tax havens it is possible to change your nationality and become a citizen of the new country. Hence the expression "I used to be British".