Cheating the revenue
Readers may have read in the press about the conviction for ‘cheating the revenue’ of a professional tax advisor, David Perrin of Vantis Limited.
If ever there was an unacceptable face of tax planning this would be it. Perrin’s plan revolved around the fact that people can get tax relief for donating shares to charities. He encouraged clients to buy shares for a few pence in companies he had set up. He then listed these on the comparatively lightly regulated Guernsey stock market and paid accomplices to buy and sell the shares to hugely inflate the apparent worth of the company. The clients then donated the shares to charity and claimed the inflated value as a tax deduction. The charities were left holding shares which soon turned out to be worth next to nothing.
HMRC challenged the whole thing as completely artificial and dishonest and who could disagree?
Mr Perrin now awaits sentence and confiscation orders on the wealth he amassed in fees.
Questions must remain about what clients thought was happening. What were they told? “Buy these shares and then when they go up in value donate them to charity”? Unless the client knew what was happening, wouldn’t he want to just hold on to his newly acquired and ‘valuable’ shares?
What can we learn from this? Firstly that there are lots of legitimate ways to reduce your tax bill and at Barnes Roffe LLP that’s what we deal in. Talk to us and we’ll show you how. Secondly, if someone comes to you with a tax planning scheme that seems to good to be true, you know what? It probably isn’t true.Talk to Barnes Roffe today