Two sides of tax haven life

It is therefore hardly surprising that when the UK Chancellor announces a tax hike for the rich, individuals who resent the government’s attempt to, as they would see it, pick their pockets make their way to our shores.

Anyone who believes that allowing immigrants of this category into the Island is morally suspect on the grounds that UK tax is being avoided will surely be aware that we have housing legislation designed with the express purpose of making it possible. They are also likely to understand that the financial services industry that is the foundation of our present prosperity began through providing economic exile for the well-heeled.

Such knowledge will, of course, be shared by those who entertain no qualms about 1(i)K structures or the rights and obligations that they confer on those taking advantage of them. Housing Minister Terry Le Main, for example, is better placed than most to know the rules, and he says that we should welcome the latest influx with open arms.

In purely monetary terms, there is nothing to undermine his assertion that what is good for the public purse must be good for Jersey. In spite of this, we would do well to be fully aware of potential problems attendant on legitimate activity which, in more run-of-the-mill circumstances, passes unnoticed.

The trouble is that in the wake of the mess which certain bankers made of the business that they were supposed to understand so well, and the consequent global economic crisis, no high-flying, bonus-hungry financier is flavour of the month on the other side of the Channel. And they are likely to be even less popular if they move house and home to a low-tax

jurisdiction.

The Island has fought long and hard to live down the pejorative connotations of the ‘tax haven’ label – which for the vast majority of our financial activity is inappropriate. But it is, alas, hard to understand just what we are for the new surge of rich finance sector immigrants if not a haven from taxation.

We are, unfortunately, between a rock and a hard place. Nothing should prejudice our right to carry out legal business, but it is without doubt the case that doing so will tend to undermine our good standing – especially among those determined to see the worst and think the worst.