New Bank Leak Shows How Rich Exploit Tax Haven Loopholes The streets of Jerseys capital, St Helier. Photo: Tobias Gaulke By The International Consortium of Investigative Journalists KEY FINDINGS Government officials and their families and associates in China, Azerbaijan, Russia, Canada, Pakistan, the Philippines, Thailand, Mongolia and other countries have embraced the use of covert companies and bank accounts. The mega-rich use complex offshore structures to own mansions, yachts, art masterpieces and other assets, gaining tax advantages and anonymity not available to average people. Many of the world’s top’s banks – including UBS, Credit Suisse and Deutsche Bank – have aggressively worked to provide their customers with secrecy-cloaked companies in the British Virgin Islands and other offshore hideaways. A well-paid industry of accountants, middlemen and other operatives has helped offshore patrons shroud their identities and business interests, providing shelter in many cases to money laundering or other misconduct. Ponzi schemers and other large-scale fraudsters routinely use offshore havens to pull off their shell games and move their ill-gotten gains. The identities of thousands of wealthy offshore clients of a major Channel Isles private bank have been leaked to the International Consortium of Investigative Journalists. The individuals include donors to the British government, which has been outspoken against tax havens, and some of the most prominent people in British life. The ICIJ has exclusively allowed The Guardian newspaper to analyze more than 20,000 of the names, all of whom had dealings with a discreet Jersey, Channel Islands branch of Kleinwort Benson, a famous London firm which specializes in “wealth management.” In the interests of transparency, ICIJ and The Guardian will publish some of their findings over the coming days, detailing the offshore links of political donors; international celebrities; judges; sportsmen; businessmen; and British aristocrats. Names range from vacuum cleaner tycoon James Dyson to Hollywood actor Mel Gibson. Today The Guardian identifies party donors who over the years have paid more than £8m to the governing Conservative party. One of the recipients of donations is Britain’s newly-promoted financial services minister, Andrea Leadsom, who has run into a “Cash for Office” allegation after she told The Guardian she was unaware of the size of large offshore donations to the Conservatives made by her own family. Actor Mel Gibson, left, and British MP Andrea LeadsomActor Mel Gibson, left, and British MP Andrea Leadsom. [Photos: s_bukley / Shutterstock and Matthew Smith, Policy Exchange[ The ICIJ has previously published secret internal records of offshore companies in the British Virgin Islands. ICIJ director, Gerard Ryle, said: “We make this information available not because what we found is illegal but because we think most people would think it unfair. Tax havens allow some people to play by different rules.” At a time of debate about inequalities of wealth in the UK, the data leaks reveal how the very richest families dip in and out of British jurisdiction as it suits them, exploiting what academic experts call Jerseys fictitious space. British finance minister David Gauke last year called for transparency from users of the tax haven, saying: “The time has come for those with hidden offshore interests to come forward.” A British government report stated: “In the past, offshore accounts and other complex arrangements were shrouded in secrecy, so some people felt that they could dodge their tax obligations ... Those days are gone.” Kleinwort BensonKleinwort Bensons website.Government ministers launched a scheme for Jersey account-holders to make disclosure. They claimed the big challenge the authorities face is secret tax evasion, which is a crime. The British Chancellor George Osborne announced in April: “If you’re evading tax offshore, there is no safe haven and we will find you.” But The Guardian findings contradict this picture of illegality. Many Jersey loopholes used by wealthy Britons to pass on their fortunes appear from The Guardian’s research to have been perfectly legal. Both the ruling Conservatives and to a lesser extent the Labour opposition party have benefited by political donations from such individuals. There is no published register of trusts or offshore holdings, and the rich appear to have often been able discreetly to avoid taxes, particularly inheritance tax, in ways too expensive for smaller people to use. Children and other beneficiaries may have often had no hand in it themselves. The Earl of Guilford, for example, told The Guardian: “I inherited money from a deceased relative that was held in an offshore trust ...I have ... made full disclosure of this to HMRC [the British tax authorities]. You will understand that I did not establish an offshore account and was faced with the decision as to what to do with this money.” Clarification: Sir James Dyson’s former trust in the Channel Islands was through Orbis Trustees Guernsey Limited rather than Kleinwort Benson, which purchased Orbis after the trust was wound up in 1999, according to Dyson’s representatives. No income was derived from the trust, nor was any tax avoided. Contributors to this story: David Leigh and James Ball icij.org/offshore/new-bank-leak-shows-how-rich-exploit-tax-haven-loopholes
Posted on: Wed, 10 Dec 2014 17:18:56 +0000
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