Death may be certain, but taxes don't have to be.
It's an international marketplace after all, and there are plenty of nations willing to welcome expatriates fed up with The Feds.
Countries like the Bahamas make tax haven status an integral part of their marketing--relocate to Nassau, and you'll fear no tax man. That's because, for Bahamians and resident aliens there are no taxes on personal income, capital gains, inheritance or gifts.
"The policy benefits the Bahamas indirectly," says Terrance Bain of FT Consultants, an accounting and tax planning firm in the Bahamas. "A person coming to the Bahamas will buy real estate or operate some kind of business. Most luxury properties are marketed to and eventually bought by non-Bahamians--it's a very robust market."
- In Pictures: Tax Havens of the World
- In Pictures: Tax Havens of the World
- In Pictures: Billionaire Homes
Good weather and no audits, it's almost unfair.
The History
Tax havens grew out of the late 19th-century British system that began granting independent economic governance to protectorates like Gibraltar, Hong Kong or the Channel Islands, which then became easy places for people to protect money--hence the term off-shore accounts.
By the 20th century, high net-worth individuals were flocking to small islands like Monaco and Bermuda, whose governments figured the money they could garnish off real estate transactions and sales tax made the tax-free incentives worthwhile.
From San Francisco to Sydney, find out how much--or how little--property your dollar will fetch.
"Monaco is a luxury destination," says Maguy Maccario-Doyle, consul general to the United States. "It is a soft tax system, but we do have a value added tax around 30% on luxury items such as jewelry or restaurants and all the best luxury people are here within a square mile."
And it works. Six of the Forbes Billionaires reside in Monaco, making one in every 5,400 residents worth over a billion dollars. The principality's housing market commands a median price of $3,000 dollars per square foot, ahead of Manhattan and London, according to international real estate analysts Global Property Guide.
Bermuda, though it has only three billionaires, has the highest gross domestic product per capita in the world at $70,000 per citizen. Hiding out in Bermuda is so popular, in fact, that the government makes it virtually impossible to get permanent residency, and requires that foreigners buying into the market pay a minimum of $1 million for their home and then a 22% transfer fee to the government.
Those may be luxury prices, but it's a small price to pay for the tax breaks. Non-profit group Tax Justice Network estimates that offshore tax havens shielded over $255 billion in global tax revenue in 2006, a number roughly equal to a third of India's overall GDP.
Living The Luxe Life
But should you choose to relocate to one of the world's tax havens, what can you expect?
Even when relocating to paradise, moving abroad can be a tough adjustment. But it can also offer opportunities for you and your family to explore local culture or take up new hobbies.
Cities like Hong Kong and Geneva offer as many cosmopolitan amenities as you can expect to find anywhere, with many of the comforts of home, from cinemas showing American movies to top-notch international cuisine.
Moving to a small island, though, can make it harder to import your lifestyle -- but fortunately the way of life most offer is alluring. Bermuda, for example, has nine golf courses crammed into just 20.6 square miles and temperatures that seldom fall below 60 degrees (16 celsius) or rise above 85 (29 celsius), meaning that it's a rare day you can't play. In the British Virgin Islands, it would be a sin not to work on your skippering skills, while a move to the Cayman Islands virtually requires an interest in snorkeling or scuba diving.
Monaco and Gibraltar are among our most miniscule tax havens, but there's no need to feel confined. If you tire of the gambling, sunbathing and nightclubbing to be had in Monaco itself -- which may take a while -- the French Riviera is just a short convertible drive away. From Gibraltar, visit Spanish beaches or the Moorish architecture of Andalusia.
That is if you're not glued to your computer. It takes work to make all that tax-free money, after all.
"With the onset of the internet--doing business like we do business today--someone can live in a fabulous home here in Lake Tahoe," says Chase, "and do business around the world."
