Heavenly Havens
By Catherine Moye
 
The phrase "tax haven" conjures a twin image of swimming pools and tedious form filling; of meeting to discuss your financial affairs with a Hawaiian-shirted adviser under a coconut palm. But never before has the package of fiscal inducements that exotic islands offer looked so alluring to wealthy people battered by the current financial markets and looking to shore up their assets in idyllic settings. Whether it be retirees consolidating their pensions, entrepreneurs looking to establish off-shore companies or individuals on the hunt for centres of low taxation, the market is as international as the destinations. The mobile nature of modern-day business has further liberated high-flyers from key commercial capitals.

By 2020 an extra 2.3m Britons over the age of 50 (one in five retirees) will have retired abroad, according to research by Alliance and Leicester International. Many of those, like 68-year-old Andy Leck and his wife, Eileen, will be heading to the Mediterranean island of Cyprus. "The climate was the most important thing attracting us, then the 5 per cent tax on my pension- I was paying 40 per cent back home," says Leck, a former chief executive with a house-building company. "That means I save £40,000 a year by being in Cyprus rather than Britain." Leck is among those taking advantage of Cyprus's double tax treaties with 33 countries, including most western "high-tax" countries and most central and eastern European states. The island was recently highlighted as a good place for retirees by Shelter Offshore, which said it offers the "perfect blend" of good weather and financial savings.
 
Copyright © Financial Times
Published: July 19 2008