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Out of interest, what tricks are these (genuine question)? Stock grants are often taxed less (but not 0). In the UK at least I don't know any real 'tricks' to g

Out of interest, what tricks are these (genuine question)? Stock grants are often taxed less (but not 0). In the UK at least I don't know any real 'tricks' to get rid of £10m salary for a CEO. You will be paying around 47% marginal tax on that.

efficax 6y ago
Incorporate yourself and have your salary be paid as management fees to the corporation. Declare those fees as a capital gain and pay 15% tax. Or, have the corporation housed in a tax haven, pay almost nothing in taxes. Setup a foundation, use that foundation to employ friends or relatives (like say, your wife). Pay out very little in charity but take your donations to the foundation as a tax write off. Etc.
- gruez 6y ago
  >Incorporate yourself and have your salary be paid as management fees to the corporation This is harder than you think: https://en.wikipedia.org/wiki/Piercing_the_corporate_veil https://en.wikipedia.org/wiki/Piercing_the_corporate_veil >Declare those fees as a capital gain and pay 15% tax. That's tricky. You can't just take money out of the corporation's coffers and say it was capital gains. You'd need to sell off your shares or something. Otherwise it's a dividend and is taxed as income. >Or, have the corporation housed in a tax haven, pay almost nothing in taxes. You still need to repatriate it back to your personal account somehow. >Setup a foundation, use that foundation to employ friends or relatives (like say, your wife). ...which they're promptly taxed on. Actually you don't even need a foundation, you can just employ them at the corporation from earlier.
  - efficax 6y ago
    Yes a lot of it is difficult, which is why rich people hire people to figure this out for them. Mitt Romney is the inspiration for the management fees as capital gains trick. https://www.businessinsider.com/law-professor-says-one-of-romneys-tax-avoidance-schemes-was-illegal-2012-8 https://www.businessinsider.com/law-professor-says-one-of-ro... The point of the foundation is you evade taxes with the writeoff. Using it to pay your friends/family is just a bonus. It also helps to win you goodwill, you get to have galas etc. and convince people you're one of the good ones.
- martinald 6y ago
  I don't think any CEO can just incorporate themselves like that. They have a bunch of duties to do and the company would want them being 'personally' responsible for them.

efficax 6y ago

Incorporate yourself and have your salary be paid as management fees to the corporation. Declare those fees as a capital gain and pay 15% tax. Or, have the corporation housed in a tax haven, pay almost nothing in taxes. Setup a foundation, use that foundation to employ friends or relatives (like say, your wife). Pay out very little in charity but take your donations to the foundation as a tax write off. Etc.

gruez 6y ago
>Incorporate yourself and have your salary be paid as management fees to the corporation This is harder than you think: https://en.wikipedia.org/wiki/Piercing_the_corporate_veil https://en.wikipedia.org/wiki/Piercing_the_corporate_veil >Declare those fees as a capital gain and pay 15% tax. That's tricky. You can't just take money out of the corporation's coffers and say it was capital gains. You'd need to sell off your shares or something. Otherwise it's a dividend and is taxed as income. >Or, have the corporation housed in a tax haven, pay almost nothing in taxes. You still need to repatriate it back to your personal account somehow. >Setup a foundation, use that foundation to employ friends or relatives (like say, your wife). ...which they're promptly taxed on. Actually you don't even need a foundation, you can just employ them at the corporation from earlier.
- efficax 6y ago
  Yes a lot of it is difficult, which is why rich people hire people to figure this out for them. Mitt Romney is the inspiration for the management fees as capital gains trick. https://www.businessinsider.com/law-professor-says-one-of-romneys-tax-avoidance-schemes-was-illegal-2012-8 https://www.businessinsider.com/law-professor-says-one-of-ro... The point of the foundation is you evade taxes with the writeoff. Using it to pay your friends/family is just a bonus. It also helps to win you goodwill, you get to have galas etc. and convince people you're one of the good ones.
martinald 6y ago
I don't think any CEO can just incorporate themselves like that. They have a bunch of duties to do and the company would want them being 'personally' responsible for them.