Hanging out in the dog park, chatting with a neighbour in my fancy Toronto neighbourhood the other day, asked a question about the local public school, where his kids attend. “Oh no,” he says, “they don’t go there anymore.” And now here comes the kicker:
We have them in boarding school, in the Cayman Islands.
How exactly do you respond to that? “Uh-huh,” is the best I could come up with.
It is clever. You have your offshore account, with presumably a lot of money in it that you presumably haven’t paid tax on. In order to spend it, you need to get it back to Canada, but that’s hard to do without attracting some attention from the CRA. Boarding school in the Cayman Islands is the perfect solution. That way you can take your money, convert it to human capital, then smuggle it back into the country in the form of your own child.
Several years ago I remember reading a little joke in The Economist, about how rich people, instead of getting themselves into all sorts of trouble importing domestics from the Philippines, would be better off just “off-shoring” the children. Send them to a village in the Philippines to be raised there. Perfect solution — after all, it’s not like you have time to see them, and this way their nanny could be with her own kids too!
So that was obviously a joke. But off-shoring your children to a tax haven, it appears, is not.