martinsmithstories

Image credit: https://pixabay.com/photos/squirrel-wild-animal-rodent-animal-6098360/

There was once a squirrel who lived with his family in the hollow of an old oak tree that sat majestically in the middle of a great park. The squirrel was a workaholic and a tad obsessive about gathering enough acorns to stave off starvation during the long, cold winter. All day, every day, and all night, every night, he scurried about the park and gathered acorns and hauled them home and stored them, only to head off again.

‘You’re getting black rings under your eyes,’ his wife said.

‘Plenty of time for sleep once winter arrives,’ he said.

On and on he searched and hauled, and bigger and bigger became the acorn pile stored in the hollow in the tree.

‘You’re run off your feet,’ his wife said the day the squirrel returned home with part of a hindlimb missing, courtesy of a fox’s snapping jaws.

‘Rubbish,’ the squirrel said. ‘It’s a mere scratch. I’ll have plenty of time to put my foot up once winter arrives.’

On and on he searched and hauled, and bigger and bigger became the acorn pile stored in the hollow in the tree.

‘Your job’s going to kill you,’ his wife said the day the squirrel returned home with a forelimb missing, courtesy of a poacher’s bullet.

‘Bollocks,’ the squirrel said. ‘It’s only a flesh wound. I’ll have plenty of time for living once winter arrives.’

On and on he searched and hauled, and bigger and bigger became the acorn pile stored in the hollow in the tree.

‘You’re neglecting your family,’ his wife said the night the squirrel returned home from a three-day foraging bender. ‘You missed our son’s graduation, our daughter’s birthday, the twins’ concert and our wedding anniversary, and we’ve not had squirrel sex since spring. I’ve had enough. I’m leaving you.’

And she packed her bags, gathered her children and moved two oak trees down to live with a squirrel who outsourced his acorn gathering and had a work-life balance and a decent libido.

The squirrel shrugged his shoulders. ‘Oh well,’ he said, ‘more room for my nuts.’

And on and on he searched and hauled, and bigger and bigger became the acorn pile in the hollow in the tree.

Late one day, as winter’s cold threatened, the squirrel returned home and placed one last acorn at the top of the acorn pile.

As he surveyed his haul, a tiny voice said, ‘My word, that’s quite a stash you’ve gathered there. How many do you have?’

The squirrel looked down and saw an ant.

‘Why, thank you, little one. I’ve collected one hundred nuts, by my count. I shan’t go hungry this winter.’

‘Indeed. But I suspect the government will want its share.’

‘What? The government? What share?’

‘Its share. The Tax Act specifically states that fifty per cent of all acorns gathered within a financial year shall be paid to the government.’

‘They can’t do that.’

‘Yes, they can, and yes, they will … unless …’

‘Unless what?’

‘Unless you get sound financial planning advice.’

‘That sounds expensive.’

‘Not really. I know someone who will guarantee you won’t pay an acorn’s worth of tax this year. All for the cost of one acorn.’

‘Really?’

‘Yes, you’ll not owe the government a single kernel.’

‘That sounds fantastic. Who is this genius?’

‘Why, none other than moi.’

‘You? Who are you?’

‘I’m Temnothorax Curvispinosus.’

‘What, are you some sort of foreigner?’

‘Indeed, I am. But you can call me Temmy.’

‘Well, Temmy, how do you know about this government tax business?’

‘I’m a financial adviser. A CPAA, no less.’

‘What’s a CPAA?’

‘A Certified Practising Account Ant.’

‘And you’ll save my nuts from the government? All for just one nut.’

‘Yes. Do we have a deal?’

‘For the sake of my nuts then, yes, we’ve a deal.’

‘Right, let’s get started. One hundred acorns, you say?’

‘Yes.’

‘Are you interested in tax minimisation or tax avoidance?’

‘What’s the difference?’

‘Prison, if the government catches you avoiding tax. And a hefty penalty payable in acorns. Look, I could set up a “bottom-of-the-pond” scheme for you, and you would not pay a single acorn to the government.’

‘Bottom-of-the-pond, you say?’

‘That’s right. It involves setting up a company for your acorn-gathering operations and then stripping it of its acorns before its tax is due, thus leaving it unable to pay acorns owed in tax. Once stripped, the company is sent to the “bottom of the pond” by being transferred to some other nutter with no interest in the company’s historical activities.’

‘That sounds scummy. What about my nuts?’

‘That’s the catch. If your sole ambition is to avoid paying a single acorn to the government, then it’s the way to go. But if you want to hang onto your acorns, then I’d not recommend such a scheme as you’ll be effectively handing your acorns on a platter to another entity.’

‘What? Hand over my nuts on a platter? I’d be nutless.’

‘I’m afraid so. And, if caught, you’ll also serve a sizeable term in prison, most likely sharing a cell with a horny, white-collared badger.’

‘Stuff the tax avoidance. No entity is getting its grubby hands on my nuts. What about this tax minimisation? Do I have to lay my nuts on the line for that?’

‘I’m glad you asked. Might I suggest that you divert part of your acorn haul to a retirement fund? There’s no way you’re going to eat all those acorns this winter. The Tax Act allows up to twenty-four acorns to be redirected to a retirement fund in any financial year, fully tax deductible. You can save yourself twelve acorns in tax by diverting a little less than a quarter of your haul to a fund. The only catch is you can’t access the acorns until you reach retirement age.’

‘But my retirement’s a decade away. My nuts won’t last that long. They’ll go to seed and won’t even be worth a nut’s arse.’

‘No, no. That’s not how it works. Your acorns will go into a pool of acorns, and squirrels throughout the park who are retired draw from the pool during their retirement years. Those retiring next year will begin accessing your acorns, and when you retire in ten years’ time, you will access the acorns gathered and diverted into the retirement pool of acorns by those industrious squirrels still working. It’s a win-win for all you nutters. You’ll have a secure retirement with a steady supply of acorns during your latter years and avoid paying the government a dozen acorns this financial year.’

‘That sounds nuts to me, but if it’ll save my nuts from the government, then I’ll give it a go.’

‘So you agree?’

‘Yes.’

‘You’ll have to act quickly as the end of the financial year is fast approaching. You’ll need to pick a fund.’

‘But I don’t know any.’

‘That’s OK. I know one that can collect your contribution today.’

‘Really?’

‘Yes. Though before I recommend them, I must disclose that I have no affiliation with this organisation.’

‘OK. Noted. Is it safe? There’s no chance I’ll lose my nuts over this?’

‘No, no. It’s government-backed. It’s as safe as squirrel dreys.’

‘What? Me? Hand my hard-gathered nuts over to the government? How’s that different to paying tax?’

‘No, it’s government-backed, not government-owned. If all the acorns go rotten, the government will step in and cover you for the loss of your acorns. It’s all very efficient. All overseen by professionals. Professional civil serv ants.’

‘OK. Got you. So, what do I need to do?’

‘You? You don’t need to do anything. Allow me to make a call, and they’ll be here in a jiffy to collect your contribution.’

And the ant turned her back to the squirrel and raised her head and quivered her antennae and motioned her mandibles. And within a minute, an army of ants arrived and carried away two dozen of the squirrel’s acorns.

The squirrel sighed in relief at having saved himself from having to surrender twelve of his hard-gathered nuts to the government’s coffers.

He still had seventy-six nuts, yet, if his calculations were correct, he still owed the government thirty-eight of his precious nuts.

‘Right, next,’ the ant said. ‘What about expenditure? The Tax Act allows you to deduct legitimate expenses incurred in gathering your acorns during the financial year. Did you incur any such expenditure?’

‘Expenditure, you say?’

‘Yes, yes. You know, costs.’

‘Costs? Well, yes, as a matter of fact. It cost me an arm and a leg.’

‘Excellent … errr … I mean … errr … from a taxation point of view. Not so good from a personal view, though.’

‘So they’re a legitimate deduction?’

‘Indeed.’

‘Will it save my nuts from the government?’

‘Well, not all of them, but how many depends.’

‘Depends on what?’

‘Depends on the extent of the cost. How much of your arm did you lose?’

‘All of it.’ And the squirrel thrust his scarred shoulder at the ant.

‘Ewww … yes, yes, I see.’ The ant’s compound eyes watered and her antennae quivered as queasiness stirred in her stomachs. ‘And your leg?’

‘I was lucky there. It only cost me half a leg.’ And the squirrel raised a scarred stump and waved it in front of the ant, who raised a couple of her legs to her greening mandibles and suppressed a bilious burp.

‘Brilliant … Again, I only speak in a taxation context. Under the Tax Act you’ll be able to claim eight acorns for the arm and four for the half-leg. That’ll save you six acorns in tax.’

‘Really? That’s fantastic.’

‘Of course, you could also bring forward any expenditure from future financial years into this financial year. For example, if you sacrifice your other arm and leg—and the stump, if you’re keen—before the end of the financial year, you’ll save yourself another ten acorns.’

‘What? And how do you propose I hold my nuts?’

‘I don’t know. I’m just a number cruncher, not a physical therapist.’

‘Well, I think I’ll keep what’s left of my appendages, for now. Right, so after I claim a deduction for my expenses, I’ll have twenty-four nuts in my retirement fund and still have seventy-six in my hollow. But by my count, I still owe the government thirty-two nuts. Are there any other deductions I can make to stop the government getting its hands on my nuts?’

‘Yes, as a matter of fact, there is. You can claim a capital allowance.’

‘A what?’

‘A capital allowance. It’s a tax deduction claimable for the decline in value of any capital assets you have.’

‘Like my nuts?’

‘No, not your acorns. Your hollow. For its ageing, and the wear and tear incurred when storing your acorns.’

‘How’s that work?’

‘It all depends on the value of the asset and its longevity. How much do you reckon your hollow’s worth?’

‘It’s priceless. There’s lots of memories and nuts in here.’

‘No, no. Let’s not be sentimental. If you were to sell it today, how much do you reckon you would get?’

‘In nuts?’

‘Yes.’

‘Stuffed if I know.’

‘Well, given it’s an ancient oak in the swank end of the park and in good nick and with pond views, I’d say, conservatively, it’s worth in the low twos.’

‘What? Two nuts?’

‘No, not two.’

‘Not twenty nuts?’

‘No, not twenty.’

‘Surely not two hundred nuts?’

‘No, not two hundred. Two thousand.’

‘Two thousand! Really? That much? Holy squirrel shit. You’re joking, right?’

‘Us CPAAs never joke. We are devoid of a sense of humour.’

‘OK. OK.’

‘So let’s say your hollow is worth two thousand acorns for capital allowance purposes.’

‘If you say so.’

‘And I’d estimate a hollow like this would last for, say, 100 years, give or take a decade or two. That gives a capital allowance rate of one per cent. And one per cent of 2,000 is … 20. Yes, that’s it. You can claim a capital allowance of twenty acorns a year. Thus you save ten acorns in tax.’

‘And not one of my nuts will leave the hollow? So I’ll still have seventy-six nuts but only owe the government twenty-two nuts?’

‘Correct.’

‘Good Lord, Temmy, you’re a marvel. How can I ever thank you?’

‘By never depreciating me.’ The ant chuckled at her wit.

‘Hey, I thought you said before that you didn’t have a sense of humour.’

‘Every once in a while I like to stray from the Account Ant Society’s Code of Conduct. Live on the wild side.’

‘You lot must be a real blast at the annual dinner.’

‘No, never at a black tie or gown function. Strictly by the ledger there.’

‘Look, Temmy, I’m still not happy about having to hand over twenty-two of my nuts to the government. Any other advice?’

‘Do you have any family?’

The squirrel looked towards the oak two trees down, and tears filled his eyes and sadness filled his heart. ‘I have four children, but they live with their mother.’

‘Have you thought about your legacy?’

‘My legacy?’

‘Yes. What you wish to leave behind for your children once you’ve eaten your last acorn and go up to the big hollow in the sky.’

‘Not really. I’ve been too busy gathering my nuts.’

‘Might I suggest you divert some of your acorn-gathering activity through a trust?’

‘What’s that?’

‘A trust is a legal relationship in which the legal title to property, namely your acorns, is entrusted to a legal entity with a fiduciary duty to hold and use said acorns for another’s—in your case, your children’s—benefit. The Tax Act permits the diversion of up to twenty-four acorns each financial year, and if you invest those diverted acorns in insurance bonds until your children come of age, not only will they not pay an acorn in tax but you will save yourself twelve acorns in tax this financial year.’

‘Really? So rather than the government getting its greedy hands on my nuts, it will be my children that get tax-free access to my nuts.’

‘Exactly.’

‘And I suppose you’ll be able to set up such a trust and divert twenty-four of my acorns before the end of the financial year?’

‘With pleasure.’ And the ant turned her back to the squirrel and raised her head and quivered her antennae and motioned her mandibles. And within a minute, an army of ants arrived and carried away two dozen more of the squirrel’s acorns.

The squirrel released another sigh of relief at having saved himself from surrendering twelve more of his hard-gathered nuts to the government’s coffers. Yet despite still having fifty-two nuts stored in the hollow and with his and his children’s futures secured, he, by his calculation, still owed the government ten nuts. He’d been the one who’d slaved away, day and night, gathering his precious nuts. Why should the government get its idle hands on them?

‘I say, Temmy,’ the squirrel said. ‘By my count I still owe ten nuts to the government. Any other suggestions?’

‘Are you a charitable squirrel?’

‘Why do you ask?’

‘I mean, would you be prepared to donate some of your acorns to a charity? Any donation is fully tax deductible.’

‘What? Surrender my nuts to the less fortunate?’

‘Yes.’

‘Phew, that’s a real tough ask. Look, I could give up one. Maybe two, at most.’

‘One will be enough. That way your taxable gatherings will drop below twenty acorns, and you will become eligible for a low-acorn-gathered tax offset of nine acorns.’

‘So you’re telling me if I donate one of my nuts to charity, I save myself not only half a nut in tax but also an additional nine nuts. That I’ll have fifty-one nuts in my hollow, plus forty-eight nuts squirrelled away for the future, and I’ll only have to pay the government half a nut in tax.’

‘Yes, and no.’

‘Yes, and no?’

‘Yes, your calculations are correct. No, you won’t owe half an acorn in tax, for my fee of one acorn is fully tax deductible. So you’ll have fifty acorns stored here in your hollow and will not owe the government a single acorn.’

‘You, my friend, are a gold-plated, certifiable genius. Thank you. Thank you.’

‘That’s OK. You’ve been a wonderful client. Now, before I go, there remains the minor matter of you nominating a charity for your donation.’

‘Any recommendations?’

‘I know this is a little unprofessional, but might I suggest AntAid? It’s a charity close to my heart.’

‘Sure, why not. I’d rather give my nut to them than the government.’

‘OK. And thank you.’

And the ant turned her back to the squirrel and raised her head and quivered her antennae and motioned her mandibles. Within a minute, a squad of ants arrived and picked up two acorns. The ant climbed on top of the acorn she’d received as remuneration for her services and gave a parting wave and an ‘Adieu’. And the squad of ants carried her and the two acorns away.

The squirrel gazed at his remaining nuts with glee. How lucky was he? Fifty nuts in his hollow. Another forty-eight tucked away for the future. Not a single nut paid in tax. And a warm-and-fuzzy philanthropic feeling. All for the cost of two nuts. How nuts was that? The ant’s prudent financial advice had set him up for life.

The squirrel looked at his pile of nuts. Hey, why not shout himself a celebratory nut? He picked up a nut and went to bite it.

A knock came at the entrance to his hollow.

‘Who the hell comes knocking at the start of winter?’

The squirrel hobbled to the entrance and looked out and saw an ant holding a large envelope.

‘Hello,’ the squirrel said. ‘How may I help you?’

‘Is your name Squirrel?’ the ant said.

‘Yes.’

‘Squirrel who lives in the hollow in the majestic oak tree with pond views.’

‘Yes.’

‘I’m a warr ant officer from the Family Court.’ He handed the squirrel the envelope. ‘I hereby serve you for unpaid alimony of fifty acorns plus interest and penalties incurred.’

‘What?’

‘You are hereby required to surrender all chattels and forfeit your place of abode forthwith.’

And within a week the squirrel, homeless and nutless, died a sad and lonely death on the wintry grounds of the great park.

Moral: Even if you think you’ve hired the best tax account ant an acorn can buy, someone—be they swindler, the government or the Family Court—will always find a way to get their hands on your nuts.

For Stephen P. Smith (1958-2021)