Why Apple and Donald Trump pay so little tax, and what you can copy

One: profit follows the intellectual property

When most of a product's value is a brand, a patent or software, a group can hold those rights in a low tax country and have every other subsidiary pay licence fees for them. The sales happen in your high street, and the profit lands elsewhere.

Two: depreciation makes a profitable building look like a loss

Property investors deduct a slice of a building's cost every year, even while the building rises in value. Rent comes in, cash is positive, and the tax return shows a loss.

Three: never sell, borrow instead

Tax on a gain normally arrives when you sell. So the very wealthy borrow against shares or property, spend the loan, and never trigger the gain. Interest can often be deducted as well.

Four: get paid in things that are taxed gently

Wages carry the highest rates and the payroll taxes. Dividends, capital gains, pension and super contributions and share awards are taxed later, or at lower rates, or both.

What of that actually works for you

Three of the four mechanisms scale down. One does not.

They must be breaking the law.

Mostly they are using written law at a scale where the fixed costs of advice and structure are trivial. Where they cross the line, as in the Apple state aid case, it takes governments years and courts to unwind.

There is a secret loophole I have not been told about.

The mechanisms are published, named and dull. The advantage is scale, patience and someone whose job it is to remember every deadline.