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CRA Investigating RBC Dominion Securities

alexmst

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Dec 27, 2004
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Employees at RBC Dominion Securities, the trading arm of the Royal Bank of Canada, are facing Canada Revenue Agency allegations that they helped clients set up offshore accounts used to evade taxes:
http://ca.news.yahoo.com/s/reuters/091214/canada/canada_us_rbc_liechtenstein
Wouldn't surprize me if true.

The following is IMHO, I do not profess to have percise knowledge of the laws involved, nor am I offering advice to be acted on.

In the U.S. there are valid and legal reasons for a wealthy individual to have offshore accounts. Civil suits. If you get in a car accident, have a malpractice suit, paternity suit, etc, etc and your money is in U.S. banks it can be fair game to court order. Not so if offshore in certain countries.

The point of offshore isn't to 'hide' money to evade taxes, but rather to pay taxes on interest as one would normally do if earned in a U.S. bank but have the assurance the the money couldn't be taken from you through civil action.

If one commits criminal acts to get the money, or doesn't declare interest earned, or doesn't declare the income, then the U.S. can make a motion for the offshore money to be frozen as the procceeds of a criminal enterprise. The Swiss and the U.S. have been talking a lot about this over the years as the U.S. attempts to crack down on tax evasion.

Many people use offshore accounts for illegal purposes such as tax evasion.
However, in Florida Swiss banks are popular legal destinations for savings to protect one's money from lawsuits that are civil. What if one's mistake exceeds ones car insurance, malpractice insurance, etc by a huge amount, and one happens to have a million dollars in savings in a U.S. bank? Good to know that you won't be destitute as your offshore money is safe from cilvil suits.

Now in cases of divorce, if the judge knows you have Swiss accounts he/she can say "Your U.S. assets are 1 million, which would be split 50/50, but since you have an additional 1 million in Switzerland your assets are really 2 million so your spouse gets all 1 million of your U.S. assets and you can keep the Swiss money outside the reach of the court, and it is a 50/50 split". I lot of medcal people in my Florida area have Swiss accounts and speak freely of it as it is not to evade taxes but to protect their money. If one has 1 miilion is U.S. assets and 5 million in Swiss assets and the judge takes all U.S. assets as part of a settlement, losing 1MM and keeping 5MM doesn't seem too bad lol though it is not a easy as that as there are other ways a judge could punish this if one works/lives in the U.S.
 
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