The offshore investment strategy used by the rich and famous (until recently), featured tax avoidance tactics based on trust law. Let’s take a closer look and analyse how these foreign trust examples take advantage of OSP. In this example, Hughes, Katz and the Durands form their trusts in order to safeguard income and property from taxation. In Hughes’ case, he wants to protect the value of his rental properties from future UK inheritance taxes. The FMP of his rental properties is simply their fair market value while the GOP is their fair market value minus the 40% inheritance tax his heirs would have to pay. The COA is the minimal cost of setting up and maintaining the trust and offshore company.
Here, we have FMP > GOP + COA = OSP.
Katz uses her trust to form an offshore company which conducts business with her Haifa company. The trust-held offshore company is profitable while the Haifa company has low or negligible profits. In this way, Katz pays little income tax in her home country. The FMP of her income (or FMI – Free market income) is higher than the GOP of her income (or GOI – Government obstructed income). Again, COA is the nominal cost of setting up and operating the trust and offshore company.
FMP (FMI) > GOP (GOI) + COA = OSP
The Durands also capitalize on the difference between FMI and GOI when they periodically wire undeclared income to their Caribbean trust account. With wise investment, the Durands see their savings grow.
What should the person wishing to take advantage of this information do?
You are invited forthwith, to be an active participant, in your defence and profit from a good offence. Your participation can take the form of civilian staff, soldier, supplier, intelligence operative, financier or introducer.
Speculation Short-selling Formulae
OSP: opportunity for speculative profits
FMP: free market price
COA: cost of arbitrage
SP: speculative profit
GOP: government-obstructed price
FMI: free market income
GOI: government-obstructed income
COC: cost of circumventing government obstruction
FMP > GOP + COA = OSP
FMP – (GOP + COA) = SP
GOP > FMP + COA = OSP
GOP – (FMP + COA) = SP
FMP1 + COC < FMP2 = OSP