Philip Green

[ratewhore]

Can someone remind me how he paid his wife that HUUUUGE dividend without paying tax? I want to do it too!!

Wonder if it's worth becoming a NL donor, thats got to be worth a punt surely?

[malvolio]

First you get a loan to the company that gives you £1.2bn free cash. Take it as a dividend, distributed by shareolding - so your wife, who owns 98% of the shares in the company gets 98% of it.

We will ignore the minor point that dividends are paid out of earned profits, and not loan cpaital.

She is a Monaco resident who therefore pays no tax. You, meanwhile, live in a house she owns but although you are a UK resident, you have not earned enough to pay your own tax and clearly you are not receiving any benefits from living in a house owned and run by your wife. So obviously there is no hint of tax avoidance and no hint of any articifial arrangements intended to minimise your tax liabilities.

S660a - what's that then...?

BTW, the guy that owns IKEA, the Bransons and the family that own GEC (among others) allegedly have much the same arrangements in place. Fair, isn't it.

[Not So Wise]

Hmm does the loan have anything important to do with the system or is just the way they did it in this case?

[malvolio]

I want a new Porsche for Christmas. Can't afford one, so I'll arrange a secured £120k business loan for MyCo. Oh look, lots of spare cash in the company at the moment. Well I'm not using it for anything else, so I'll give my wife her dividend of £120k and she can buy me the Porsche. Luckily she pays no tax in the UK, so I can have the 911 turbo rather than the Boxster.

How many elements of creative accounting are contained in that scenario I leave as an exercise for the reader...

[Rebecca Loos]

tax avoidance is not illegal
Neither are "artificial" arrangements intended to minimise one's tax liabilities - as long as they're not against the law of course

But in itself, arranging your affairs to avoid paying tax is fine - within the law.

I think the difficulty for us in replicating Mr Green's situation is getting a Monaco residence for our partner.

But if we could then we could do the same?

[ratewhore]

Seems straightforward enough. Only fly in my ointment is I really wouldn't want to give my wife 98% of the dividend based on the fact I'm divorcing her!! I wonder if I could make my Monaco resident dog a shareholder?

[Numptycorner]

He might spend it on winalot though!