For many international clients, British crown dependencies fulfill this need and remain popular locations for expats looking to centralise their wealth offshore and make legimate use of their non-resident status while they are living and working overseas. Yet the recent rumblings of the UK cutting European ties in the not too distant future indirectly impacts upon these centres, which have long used their links with the UK and its membership of the European community as a mark of stability and reliability.
In terms of the impact on Offshore Britain, much will depend on how important the centres themselves see their relationship with Europe and whether they have the commercial appetite to pursue and maintain their own links if the UK were to cut off a relationship the centers have enjoyed with the EC mainly through their crown connections.
A further option is to go it alone and work towards independence away from the UK, although the benefits of not having to fund big ticket items such as their own defence and diplomatic office may mean this won’t be viewed as a viable economic option.
There are many ifs and buts going forward, yet if we agree that uncertainty – whether political or economical – is likely to remain an ongoing factor for us all, perhaps the answer is to accept and work with these new rules of engagement to provide the highest level of certainty and stability we possibly can in order to protect wealth.
It’s an approach the crown dependencies seem happy to take. Not only are they widening their appeal outside of the UK and Europe by offering structures and services attractive to both the Far East and Middle East, we are also seeing an Offshore Britain happy to put its weight behind the new standards on global tax transparency.
Indeed, the Isle of Man, Jersey and Guernsey have all made it abundantly clear on numerous occasions that – despite Mr Cameron’s recent letter to the Crown Dependencies and overseas territories expressing once again his desire to put tax transparency high on his international agenda – they agree with the Prime Minister’s sentiments.
Tax information agreements with the UK are already in place and in line with FATCA style protocols with the US. It could even be argued that these particular centres are possibly now ahead of the UK in terms of legislation on beneficial ownership and anti-money laundering.
So, if anything, such constant regulatory, political and economic ‘uncertainty’ is in a perverse way helping to improve standards and is allowing offshore centres the means to move away from their association with tax evasion.
So bring on uncertainty – just not too much…
David Howell is chief executive of Guardian Wealth Management
