Gary Heynes, private client group partner at Baker Tilly points to recent comments from the UK’s business secretary Vince Cable who has recently espoused the author Somerset Maugham’s line that offshore jurisdictions are “sunny places for shady people”.
However, Heynes said this view is outdated and simply not true of many offshore jurisdictions, particularly many of the UK’s Crown Dependencies.To support his point, Heynes has drawn up a table which compares the regulation of the Isle of Man, Guernsey and Jersey to that in the UK.{^Image|(behavior)hover|(url)~/Images/Miscellaneous-2013/Regulations-table.aspx?width=300&height=243|(width)300|(height)243|(hspace)10|(vspace)10|(align)right|(mouseoverwidth)598|(mouseoverheight)486^}
“Many may be surprised by the fact that many of the Crown Dependencies are unlikely to fall under that description,” said Heynes.
“Activity which may fall into the ‘shady’ description can only take place where regulation is ‘light touch’ and the number of those jurisdictions are significantly diminished.
“Preserving wealth is not only about minimising tax but also ensuring that the jurisdiction in which those funds are held are politically safe, well regulated around the businesses that manage wealth, and have overseeing authorities that can take action when things go wrong. By definition, jurisdictions with that combination of security and regulation cannot be light touch.”
Heynes added that the world has “moved on significantly from the outdated view of ‘shady places’ and it is true that those who attempt to evade tax will also need to expose themselves to low regulation on the management of their money, while those who legitimately take advantage of legal tax breaks will be comfortable in putting their money in well regulated jurisdictions, content with the reporting back into the UK”.
The UK’s Crown Dependencies have been under a relatively sustained attack for some time, with UK Prime Minister David Cameron only last week calling for their leaders to come to London to sign up to tax information disclosure agreements. This is despite many of them already being in the process of establishing agreements with the UK, Europe and the US.
