How the Rich Avoid Taxes (Buy Borrow Die)

In this video, I explain the strategies used by wealthy individuals, to minimise their tax liabilities. Specifically, the following:

- 2 commonly used tax strategies (loopholes) that are used to avoid taxes
- How assets and income are taxed differently
- Capital gains tax vs income tax
- Borrowing against assets (securities backed line of credit)
- Buy borrow die
- Generational wealth
- Minimising inheritance tax

TIMESTAMPS:
00:00 - Intro
00:21 - Strategy 1
03:24 - Strategy 2

MY FILMING GEAR:

DISCLAIMER:
This content, and the ideas presented in it, are for education and entertainment purposes only. Kiran does not provide tax or investment advice. The information presented does not consider the financial circumstances of any investor, and therefore may not be suitable for all investors.
Although Kiran is an Accountant, no Accountant-Client relationship is established with the viewer in any way.

As an Amazon Associate I earn from qualifying purchases. The product links in the description are affiliate links. This means if you choose to buy something through one of these links, I may receive a commission on the sale, but it makes no difference to you as a buyer.

[JamesBrown-uurl]

*Having multiple streams of income is a game-changer for stability. Relying solely on a job may not provide enough financial security due to high rates of tax, it is important to explore additional investment opportunities to surpass one"s expectation*

[robllan]

I left 🇬🇧 because the tax system is punitive. My principal residence is now India, but I negotiated an Expat (net of tax) pay deal because I’m a foreigner. But my tax residency for investments is Singapore (my wife’s nationality) where the tax liability on capital gains is zero %. I’m pretty much priced out of Britain now.

[Owaismh]

Amazing and brilliant work, Kiran. Your explanation of this advanced tax planning topic was clear and concise.

[tz]

Good points. I use dividends as they are taxed lower and same for capital gains. Never knew about the buy borrow die, so you die with loans outstanding, wow what a process, very clearly explained.

[Susanhartman.]

The utilization of after-tax money and tax-free growth makes opening a Roth IRA very advantageous. Through a careful guidance of my FA, I did not pay taxes on my withdrawals of $2.86 million when I retired.

[kyfecep]

I was shocked when I started paying self employed tax in uk and on the tax form it said which tax avoidance schemes do you use ? What I can legally use a tax avoidance scheme and tell the government that I am avoiding paying taxes ! Absolute MADNESS !

[aminaliuk]

I can’t see why rich people would want to live by these tax rules in the first place. Most would set up offshore companies and live as a resident elsewhere. Best way to save tax. Most millionaires are leaving the UK these days.

[titopp]

The missing component in buy borrow die is that you need a business or be making money with a service or skill to pay the loan off slowly, you do not want to be just paying off interest in case you need another loan which you will if you are funding your lifestyle through loans while keeping your assets right? Also, you will be taxed on that money you generate to pay off the loans.

[harrysahota]

The average person would currently be best placed to buy assets in an isa and then have the ability to take the dividends tax free or reinvest then

[shellyperera]

Excellent video thank you. Very well presented. The other advantage of borrowing against your assets is that it reduces IHT as you only pay IHT on your net estate.

[roymakay]

Blimey! What an eye opener Kiran! Thank you.

[sarawilliam]

The continuously changing economic conditions in our society have made it necessary for people to find additional sources of income. I am a Data Scientist, but currently looking at the stock market to fuel my retirement goal of $10m, my only concern is the recent market crash. Do I stay 100% cash and wait for a bull market, or go ahead to invest anyways?

[magic_toaster]

The ultra wealthy come from wealth, that’s the easiest route to success, I’ve been investing in that strategy now for 5 years and it’s going well.

[Heathermacdonald]

I will be forever grateful to you, you changed my entire life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Katherine Stewart.

[apotter]

How do they get around inheritance tax when passing on their assets at death.

[assezzen]

Hi. Thank you for the interesting video. Do the rich ever pay back the money (principal & interest) they borrow (with assets as collateral) ? If so, how do they pay back the loan ?

[matthewoakley]

A system that has been created by all the uk political parties.
Income tax+ NI mean it is very hard to become well off salary income.
The middle class are squeezed hard. The only difference between the conservatives and labour, is labour squeeze until they pop!

[brocu]

question remains where do they take money from to pay regular loan installments ?

[jasonpatterson]

A great video Kiran. Some quality insights 👌🏿👌🏿

[derekmab]

Capital gains tax should be the same percentage as income tax or it wouldn't be fair. Governments always side with the rich because they, the law makers, tend to be rich so they benefit from lower capital gains tax themselves. Thanks you for your insightful video.