Tuesday, 20 September 2011

Abuse of 'company' - how the rich stay rich - Part 1

This is just to document one example of how 'companies' are abused by the rich to avoid taxes.

If you or I buy a property and sell it, we will be subject to a various taxes including stamp duty and capital gains tax - the average man in the street has no real scope to avoid these taxes.

However, the wealthy don't need to worry about such things. They will create a new company, and that new company will buy the property. As owners of the company they can use the property as their own (getting tax relief on all costs associated with the maintenance and upkeep of the property) and when it comes time to 'sell' the property they effect this by selling the company that owns the property to the new owner...

Because this is simply a sale of shares, there is no property stamp duty to be paid and all kinds of company tax breaks can be used to minimise (or completely avoid) capital gains and other taxes.

The 'company' is an artificial construct - an organisation with its own legal identity - that has enabled massive growth and development - however this privilege is being massively abused by the rich - as are trusts. Common people die, their estates are liquidated, taxed and redistributed - companies and trusts 'live' for ever they can acquire asserts and sit of them in perpetuity - depriving real, living, people of opportunity. And this is all for the benefit of the few mega-wealthy in our society.

Why don't politicians address this simple abuse/tax avoidance? Well where do you think their money comes from? Its a conspiracy/cartel of the rich powerful against the common man - and powerful politicians are not on the side of the common man...

1 comment:

  1. expected to revolutionize the way real estate agents work, and cut calculation time down significantly.......
    Stamp Duty