Ajay Ahuja Blog on Avoiding Capital Gains Tax

Here is a really sneaky way of avoiding Capital Gains Tax:

DON’T SELL

Now you might think what a stupid thing to say but trust me it is what the super rich do even if they want to sell.

Take Phil Green.  Self made BILLIONAIRE who is in the top 10 rich list in the UK.  He wanted to cash in his chips.  So all he did was leveraged up his group of companies to the tune of £1bn and paid a £1bn dividend to his wife who lives in Monaco.

He could of sold and said that’s that.  However he just remortgaged his business and kept it all going.

Now looking a bit deeper the reason he was able to raise £1bn was because his business could support it.  Banks were willing to lend £1bn as his profit was so damn good.

This strategy is really open to property investors who have an extremely high yield and a low mortgage balance.

This situation can occur if you buy an investment property and do not remortgage for a long time.  Rent would have risen with inflation but debt would have devalued with inflation.  Result is a large amount of equity tied up in a property with a healthy cashflow.

You simply remortgage up to a level which you feel you can comfortably manage without sending you to bankruptcy.  Then you wait for the next boom to do it all over again.  Never paying the tax man one penny.

It is an interesting strategy.  Most people get this wrong as they over borrow.  I wonder how Phil Green is getting on?

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