Mini-Budget has no surprises

UK Chancellor George Osborne has promised a new offshore strategy and a new unit to tackle offshore tax evasion.

The UK Chancellor of the Exchequer, George Osborne leaves the Treasury to deliver the half-yearly budget statement. Picture: Andrew Winning/PA Wire
The UK Chancellor of the Exchequer, George Osborne leaves the Treasury to deliver the half-yearly budget statement. Picture: Andrew Winning/PA Wire

UK Chancellor George Osborne has promised a new offshore strategy and a new unit to tackle offshore tax evasion.

While recent headlines about tax evasion and the dispute between Jersey and the UK over an account-information sharing treaty may have had workers in St Helier’s finance industry nervously focussed on TV screens during Wednesday’s statement, there were few new developments included by the Chancellor.

In his Autumn statement, a mid-term mini-Budget statement, Mr Osborne signalled a new strategy on tackling offshore tax evasion next Spring, reiterated plans for a new unit to tackle offshore tax abuse and referred again to the long-awaited General Anti Abuse Rule (GAAR) in his update to MPs in the House of Commons.

But although the response to the statement has been hostile in the UK, with attention focused on growth forecasts being downgraded and low rises promised for pensioners, there was nothing that took Jersey’s finance industry by surprise.

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Comments for: "Mini-Budget has no surprises"

Lewton

It's very reassuring to know that the local finance industry knows that it's doomed.

R B Bougourd

No doubt they will make a big show of coming down heavily on a handful of people, often with local connections, who have modest sums in offshore bank accounts while making sure that adequate loopholes remain open for the benefit of the big players with trusts, Jersey based companies and similar structures in place.

Overpopulated

From what I have seen in the UK media, the owners of the trusts and companies is who they are after. People who use Jersey and other offshore locations to buy £20m houses in London for example.

I doubt if they are really after the £350 in normal people's accounts

Bloggs

Overpopulated

No - that's not correct.

In relation to trusts they are really after those UK-domiciled people who created offshore discretionary trusts in the Crown Dependencies and didn't report them the creation of such trusts at the time, as required under UK tax law, which meant that they evaded (note, not avoided) IHT on the gift to the trust. Not only that, but they have since avoided meeting the 10-year anniversary charge, which results in a 6% charge on the value of the trust fund on each 10th anniversary. Plus penalties, plus interest.

Seems that lots of bank trust companies in particular took on a lot of these in the 1980s and 1990s and have swept them under the carpet ever since, and that the bulge under the carpet has now got far too big. Of course, the trust companies should have been reporting these as suspicious likely tax evasion since the AML rules came in, and haven't done so.

Another own goal on Jersey's part. No wonder we didn't want to sign up to automatic exchange of information. We are facing no more than we deserve for not putting our house in order.

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