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Sven-Göran Eriksson, the late football manager and former England coach, left behind a financial legacy as controversial as his career.
New reports reveal that Eriksson’s estate faces significant tax liabilities due to ill-fated investments in aggressive tax planning schemes.
Eriksson, who earned millions during his illustrious football career, found himself entangled in financial difficulties due to a failed investment strategy.
His estate reportedly owes £7.2 million to HMRC, largely stemming from investments in film-related tax relief schemes.
These schemes, once promoted as legitimate tax-saving vehicles, were later ruled non-compliant by UK tax authorities.
The schemes were marketed as a way to encourage investment in the UK’s creative industries by offering generous tax breaks.
However, HMRC’s crackdown on such arrangements in recent years has left thousands of investors, including Eriksson, facing large tax bills.
Eriksson’s case serves as a cautionary tale about the risks of aggressive tax planning.
Despite his substantial income and access to professional advisers, he became a victim of poor financial advice and the changing landscape of tax legislation.
This issue has broader implications for high-net-worth individuals and their advisers.
As tax authorities worldwide intensify scrutiny on aggressive tax schemes, robust compliance and due diligence have become more critical than ever.
The financial challenges faced by Sven-Göran Eriksson’s estate underscore the importance of getting proper tax and financial planning advice.
Even for those with significant wealth, the risks of more aggressive planning can outweigh any perceived benefits.
Eriksson’s financial troubles highlight the importance of sound tax planning. If you’re concerned about the risks of aggressive tax strategies or need advice on tax compliance, find your international tax consultant here to ensure you’re on the right track. For tailored UK tax advice, get in touch with our specialists to safeguard your finances.
Western businesses operating in Russia are facing renewed scrutiny as global efforts to isolate the country economically intensify.
Sir Richard Branson has added his voice to the debate, urging companies to reconsider their presence in Russia.
At the heart of the issue lies the $21.6 billion in taxes these firms reportedly paid to the Russian government in 2023, indirectly supporting its military operations.
The ongoing conflict in Ukraine has prompted widespread sanctions and restrictions on Russia, aiming to curb its financial and military capacity.
However, many Western firms have chosen to maintain operations in the country, citing legal obligations and concerns about abandoning market share to competitors.
Sir Richard Branson has criticised this stance, arguing that the taxes paid by these businesses directly contribute to Russia’s military capabilities.
Branson’s remarks add to the ethical quandary for multinational corporations: Should they prioritise profits, or align their operations with the global outcry against the war?
Many companies face challenges beyond ethics.
Withdrawing from Russia often involves financial losses, complex contractual obligations, and navigating legal frameworks that may not favour foreign entities exiting the market.
Some firms argue that staying ensures continued compliance with Russian law and provides a platform for eventual re-engagement when geopolitical tensions subside.
Nevertheless, the reputational risks are significant.
Public sentiment in Western countries leans heavily towards disengagement from Russia, and consumer boycotts of companies perceived as complicit in the conflict are a growing concern.
Western firms in Russia face a stark dilemma: the financial implications of exiting versus the ethical consequences of staying.
As geopolitical tensions persist, these decisions will continue to draw public scrutiny.
If you’re navigating the complexities of tax obligations in politically sensitive regions or require strategic advice, please get in touch.
Alternatively, if you’re a tax adviser interested in discussing international tax challenges, join our network.
In the past few weeks, two US federal courts authorized the IRS to issue John Doe summonses to third parties, targeting taxpayer information.
One of theses summonses addresses the gig economy, while the other one is in relation to offshore transactions.
A John Doe summons is a powerful investigative tool that allows the IRS to gather information about unidentified taxpayers suspected of non-compliance with tax laws.
The name reflects the anonymity of the taxpayers involved, as their identities are unknown to the IRS at the time of the summons.
For a federal district court to authorize such a summons, the IRS must meet strict criteria, demonstrating that:
On December 20, 2024, the U.S. District Court for the Central District of California authorized the IRS to issue a John Doe summons to JustAnswer LLC, a digital platform connecting users with professionals for answers to their questions.
The government had petitioned for records identifying experts paid $5,000 or more in any calendar year from 2017–2020.
JustAnswer operates by charging users fees to ask questions, which are answered by professionals such as doctors, lawyers, engineers, and tax advisers.
A portion of these fees is paid to the experts, with bonuses added as part of an incentive program.
The IRS investigation was triggered by instances where professionals paid by JustAnswer failed to report their earnings as income.
In its petition, the IRS referenced five taxpayers who had been paid through the platform but omitted this income on their tax returns.
The court found sufficient grounds to believe widespread non-compliance among JustAnswer experts and approved the summons.
Following the ruling, the Department of Justice Tax Division issued a statement underscoring its commitment to addressing tax compliance in the gig economy.
On December 23, 2024, the U.S. District Court for the Southern District of New York authorized the IRS to issue John Doe summonses aimed at uncovering U.S. taxpayers who may have used Trident Trust Group or its affiliates to conceal assets or income overseas.
The summonses target financial institutions, clearinghouses, and other entities connected to Trident, including its US affiliate, Nevis Services Limited.
The IRS is seeking records from 2013 onward related to taxpayers who used Trident’s services to establish or manage:
The government’s petition highlighted cases of non-compliance disclosed through the IRS’s Offshore Voluntary Disclosure Program, including nine taxpayers who utilized Trident’s services to hide income or assets.
The court agreed there was a reasonable basis to believe these activities were part of a broader pattern of tax evasion.
While changes in political leadership often signal shifts in enforcement priorities, these recent actions make it clear that the IRS is leveraging its existing tools to tackle tax compliance issues aggressively.
Whether targeting gig economy workers or offshore account holders, the agency is sending a strong message: all income, regardless of source, must be reported and taxed appropriately.
If you have questions about John Doe summonses, tax compliance, or any related matters, please get in touch.
Alternatively, if you’re a tax professional looking to share insights and join a network of experts, explore our membership opportunities.
With Donald Trump eyeing another term as U.S. president, the international tax landscape could face significant turbulence.
Trump’s administration has hinted at targeting countries that impose additional taxes on U.S. multinationals.
This raises concerns about retaliatory tariffs and potential conflicts over the OECD’s global minimum tax pact, which aims to ensure large companies pay at least 15% tax wherever they operate.
The OECD’s two-pillar tax reform seeks to address long-standing challenges in taxing multinational corporations.
While many countries, especially in the EU, are implementing these reforms, U.S. Republicans claim the measures unfairly target American companies.
Trump’s administration could respond with punitive tariffs, potentially triggering global economic disputes.
The US plays a crucial role in global economic stability.
A confrontational approach to international tax rules could fragment global cooperation and undermine the OECD’s efforts to harmonize tax systems.
Businesses caught in the crossfire will need robust strategies to navigate these uncertainties.
Trump’s potential return to power adds a layer of unpredictability to the already complex global tax landscape.
As the world adjusts to new tax norms, balancing domestic interests with international commitments will be key to maintaining stability.
If you have any queries about this article on Trump’s global tax war, or tax matters in the US, then please get in touch.
Alternatively, if you are a tax adviser in the US and would be interested in sharing your knowledge and becoming a tax native, then there is more information on membership here.
The way multinational corporations (MNCs) are taxed has long been a topic of debate.
With the rise of the digital economy, traditional tax rules have struggled to keep pace, allowing some companies to minimize their tax liabilities by operating in low-tax jurisdictions while earning substantial revenues elsewhere.
Enter the OECD’s Pillar One, a groundbreaking effort to ensure fairer taxation of MNCs by reallocating taxing rights to market jurisdictions.
This article explains what Pillar One is, how it works, and what it means for businesses and governments worldwide.
Traditionally, corporate taxes are paid where a company has a physical presence, such as an office or factory.
However, in the digital era, companies can generate significant profits in countries without having a physical footprint, leaving those countries with little or no tax revenue.
This issue is particularly evident with tech giants that provide digital services globally but pay minimal taxes in the markets they serve.
The lack of a global framework to address this has led to unilateral measures like digital services taxes (DSTs), which complicate international trade and risk double taxation.
Pillar One seeks to address these issues by establishing a standardized global approach.
Pillar One is part of the OECD’s Two-Pillar Solution to address the tax challenges of the digital economy.
It focuses on reallocating taxing rights so that countries where consumers or users are based can claim a share of the tax revenue from the profits generated there.
Despite its ambition, Pillar One faces several hurdles:
Pillar One represents a seismic shift in global taxation.
For governments, it promises fairer tax revenues from MNCs operating in their markets.
For businesses, it provides a unified framework that reduces the risks of fragmented and overlapping tax regimes.
While it may require significant adaptation, Pillar One seeks to create a more equitable and predictable global tax system.
Pillar One is a bold and necessary step toward addressing the challenges of taxing the digital economy.
By reallocating taxing rights to market jurisdictions, it aims to ensure that profits are taxed where value is created.
However, successful implementation will require unprecedented global cooperation and careful management of potential pitfalls.
If you have any queries about this article on Pillar One, or tax matters in international business, then please get in touch.
Alternatively, if you are a tax adviser in international business and would be interested in sharing your knowledge and becoming a tax native, then there is more information on membership here.
HMRC’s latest figures show an 11% increase in the collection of tax debts from UK taxpayers living overseas.
This rise highlights the UK’s enhanced efforts to track and recover unpaid taxes from expatriates, though concerns remain about the accuracy of data used in such initiatives.
With an increasingly global workforce, tracking tax liabilities across borders has become a pressing issue for tax authorities.
For HMRC, the challenge lies in identifying and pursuing debts from taxpayers who have left the UK, often with limited contact information.
HMRC employs a combination of international agreements, including tax treaties and information exchange frameworks, to locate and recover tax debts from overseas residents.
Recent advancements in digital tools have also enhanced HMRC’s ability to cross-reference data and pursue outstanding liabilities.
While the 11% increase in recovered debts is noteworthy, questions remain about the reliability of HMRC’s data.
Incorrect or outdated information can lead to taxpayers being wrongly pursued, undermining trust in the system.
Experts have called for greater transparency and accuracy in HMRC’s processes.
HMRC’s efforts to recover overseas tax debts reflect its commitment to ensuring tax compliance.
However, the approach must be balanced with safeguards to prevent errors and maintain public confidence in the tax system.
If you have any queries about this article on HMRC’s overseas debt collection, or tax matters in the UK, then please get in touch.
Alternatively, if you are a tax adviser in the UK and would be interested in sharing your knowledge and becoming a tax native, then there is more information on membership here.
Rupert Grint, famously known as Ron Weasley in the Harry Potter franchise, has found himself at the centre of a significant tax dispute.
A UK tribunal recently ruled that Grint owes £1.8 million in taxes after he incorrectly classified his earnings for tax purposes.
This case sheds light on the complexities of tax compliance for high-net-worth individuals, particularly those in the entertainment industry.
The dispute arose over how Grint managed his finances between 2009 and 2010.
During this period, he attempted to shift £4.5 million of his income from acting into capital accounts.
The move was aimed at securing a lower tax rate, as capital gains are often taxed at lower rates compared to income tax.
However, the tribunal agreed with HMRC that the transactions, as they were mainly motivated by the obtaining of a tax advantage, they fell foul of specific anti-avoidance provisions.
This case serves as a cautionary tale for individuals managing large sums of money, particularly those with income from diverse sources.
Tax laws can be complex, and seemingly straightforward financial decisions can have substantial tax implications.
For actors and entertainers, income streams often include not only salaries but also royalties, endorsements, and residual payments.
There are several takeaways from Grint’s experience:
Rupert Grint’s tax troubles underline the complexities of tax compliance for entertainers and other high-net-worth individuals.
While the allure of tax savings is understandable, it’s crucial to navigate the rules carefully to avoid running afoul of the law.
If you have any queries about this article on the Rupert Grint tax case, tax disputes for entertainers or tax matters in the UK more generally, then please get in touch.
Alternatively, if you are a tax adviser in the UK and would be interested in sharing your knowledge and becoming a tax native, then there is more information on membership here.
Roger Ver, famously known as “Bitcoin Jesus” for his early and passionate advocacy of cryptocurrency, finds himself at the centre of a legal battle with the U.S.
Internal Revenue Service (IRS). The dispute revolves around an eye-watering $48 million tax bill, allegedly tied to Ver’s renunciation of U.S. citizenship in 2014.
At the heart of the case lies the expatriation tax, a measure designed to ensure individuals departing the U.S. tax system settle their dues before cutting ties.
For Ver, who reportedly misrepresented his Bitcoin holdings, this law has led to allegations of tax evasion, filing false returns, and even mail fraud.
The expatriation tax—officially the Expatriation Tax under the Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008—is a mechanism to prevent high-net-worth individuals from sidestepping U.S. taxes by renouncing their citizenship.
The law applies to:
Under this rule, certain assets are treated as if sold (a “deemed sale”) the day before expatriation, and any unrealized gains are taxed.
For instance, if you hold stock with a cost basis of $500,000 that is now worth $1 million, the $500,000 gain is taxed—even if you haven’t sold the stock.
In Ver’s case, his Bitcoin holdings and associated business assets are central to the IRS’s allegations.
Back in 2014, Bitcoin was in its nascent stages, and Ver was among its most vocal proponents.
However, the IRS claims that Ver significantly understated the value of his crypto assets, including those held by his companies MemoryDealers and Agilestar.
By 2017, Bitcoin’s meteoric rise in value amplified these alleged understatements.
According to prosecutors, Ver sold tens of thousands of Bitcoin through his businesses, earning approximately $240 million—tax-free.
Additionally, Ver is accused of:
Ver’s legal team has pushed back hard against the allegations, framing the expatriation tax as:
Moreover, Ver’s lawyers have accused the IRS of ignoring documentation that purportedly demonstrates his lack of intent to evade taxes.
Conversely, the IRS insists that Ver knowingly underreported his assets and acted in bad faith to reduce his tax liability.
The Ver case underscores broader challenges in taxing cryptocurrencies:
The IRS’s aggressive stance suggests a growing resolve to close loopholes and enforce compliance in this fast-evolving sector.
The stakes couldn’t be higher:
For Ver, a man who once epitomised the promise of decentralised finance, this legal battle could mark a significant fall from grace.
Roger Ver’s case represents a seminal moment in the crossed paths of crypto and taxation.
It highlights the complexities of applying traditional tax frameworks to modern assets and the importance of accurate reporting in an era where digital currencies are becoming mainstream.
For individuals considering expatriation or those heavily involved in cryptocurrency, this case serves as a stark reminder of the risks and responsibilities.
If you have any queries about this article on Bitcoin Jesus and the expatriation tax, or tax matters in the United States, then please get in touch.
Alternatively, if you are a tax adviser in the United States and would be interested in sharing your knowledge and becoming a tax native, then there is more information on membership here..
Yes, Austria has specific legislation for the taxation of crypto-assets.
The rules were introduced in 2022 as part of the Austrian Income Tax Act.
When you exchange crypto-assets for conventional fiat currency – such as USD, EUR, or GBP – any capital gains you make are taxable.
The taxable amount is the difference between the value received and the tax acquisition cost of the crypto-asset.
This is taxed at a rate of 27.5%.
Exchanges of crypto-assets for goods, services, or FIAT currency are treated the same for tax purposes—they trigger the realisation of capital gains.
However, exchanging one crypto-asset for another (for example BTC to ETH to SOL) is different.
In this case, no capital gains are realised immediately.
Instead, the crypto-asset you receive inherits the tax acquisition cost of the one you gave up, deferring taxation until a later event.
The distinction between professional and casual crypto trading depends on general Austrian income tax rules.
Casual traders are those managing private assets.
However, if someone invests significant time and effort into trading crypto-assets, aiming for income beyond what casual management would yield, they may be considered a professional trader.
Professional income is taxed differently from capital returns.
Indicators include the number of trades and investments in specialised equipment.
Losses from crypto-assets must be offset in the same tax year they are realised. They cannot be carried forward to future tax years.
No, NFTs are not subject to the special tax rules for crypto-assets.
They are treated like movable assets.
Selling an NFT within one year of acquisition qualifies as “speculative trading” and is taxed at progressive income tax rates.
Income from mining is treated as current income and taxed at 27.5%.
Mined crypto-assets are valued at EUR 0 for tax purposes.
When these assets are sold for FIAT currency, any increase in value is taxed as realised capital gains.
Yes.
Income from crypto-assets must be declared to the tax authorities after the tax year ends, following general tax rules.
Starting 1 January 2024, Austrian crypto-asset service providers must calculate, withhold, and remit taxes on crypto income directly to the authorities.
Currently, there are no additional specific provisions regarding the taxation of crypto-assets in Austria.
If you have any queries on this article on Crypto Tax in Austria, or crypto tax matters more generally, then please get in touch.
The Organisation for Economic Co-operation and Development (OECD) is an international organisation that works to promote economic growth, trade, and development across its 38 member countries.
The OECD was founded in 1961, and its mission is to help countries improve their economies and the well-being of their citizens.
One of the OECD’s main roles is to create international standards and guidelines for tax policies, trade practices, and economic cooperation.
It plays a key role in global tax reform, especially through initiatives like Base Erosion and Profit Shifting (BEPS) and the development of the Global Minimum Tax.
The OECD provides a forum for governments to discuss and coordinate economic policies.
It collects and publishes data on a wide range of economic issues, such as tax policies, trade, and social programs.
The OECD also creates guidelines and recommendations that help countries improve their tax systems, reduce poverty, and promote sustainable growth.
In recent years, the OECD has been leading efforts to combat tax avoidance by multinational companies through its BEPS initiative.
This initiative aims to close loopholes in international tax laws and ensure that companies pay taxes where they earn their profits.
The OECD is important because it helps countries work together to solve global economic problems.
By creating international standards and encouraging cooperation, they help to create a more stable and fair global economy.
In the area of taxation, the OECD’s work has been instrumental in tackling the challenges of globalisation and the digital economy.
Its Pillar One and Pillar Two initiatives aim to ensure that large multinational companies pay their fair share of taxes and that countries can collect the tax revenue they need to support public services.
The OECD plays a crucial role in shaping international economic policy.
Through its work on tax reform, trade, and economic development, they help countries create policies that promote growth, reduce inequality, and ensure that companies contribute fairly to the global economy.
If you have any queries about this article, then please get in touch.