A commentator on this blog said recently:
The JFSC does know how many trusts are in Jersey. Just because this information is not made public what is the big deal?
He later added:
Every regulated entity must supply complete details of every client for compliance and licensing requirements and this includes Trusts. Believe me. They know what Trusts are in existence.
I challenged him, saying:
Please prove it. Chapter and verse. Details of what is provided. Precisely. And what statute and regulation requires it. And what details of the client have to be given, precisely. But I stress: chapter and verse. With reference to actual regulation, and documents.
To which his response has been:
With all due respect, but what authority do you have over Jersey to provide you with any proof? I know that the JFSC has a listing of all clients and it is part of the licence requirement and thats that.
This transparency argument is flawed, it is simply an untruth.
Which I find extraordinary. I am told the transparency argument is flawed, and yet all I am doing here is asking for a reference to regulation that proves this person's case, and I am denied that evidence.
So let me weight the evidence of the respective arguments. First, I have been told repeatedly by people in Jersey that the Jersey authorities do not know how many trusts are in the island because there is no register of trusts and no obligation for their existence to be reported. For example, there is no requirement that they submit a tax return.
Second, I know of no regulatory authority with regard to money laundering in the world that requires a registered person to submit their client list to that regulatory authority. Why should they?
Third, I will reasonably presume from the failure to produce the evidence that I requested that there is no documentation that does actually require submission of this client list.
In that case, I stand by my argument. No one anywhere has any idea how many trusts there are in Jersey, and whether as a result they are regulated or not. What we do know is that not one of those trusts is required to produce accounts for any form of public inspection, and so long as they are for the benefit of nonresidents, not one has to submit a tax return anywhere, least of all in Jersey.
In that case I think my argument about transparency is proven.
I think I've proven something else as well: those who bluster from the Channel Islands and the Isle of Man on this blog are just blustering. There is no substance to their argument.
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Dear Richard
Would you be happy for all your financial affairs to be made public? Maybe you would like your WILL to be made public now just to prove transparency? You have no authority to DEMAND any information from jurisdictions run outside of your remit. All you are doing is casting dispersions on the outside jurisdictions because of your own personal curiosity and such comments actually creating ill feeling from the 100,000‘s people that live and work in those separated jurisdictions.
All you are demonstrating is that you just do not know because it is evident that you have never worked offshore.
So instead of ridiculing my posts, show me where I can publically access personal financial data about any personal financial vehicle onshore first so that you can at least demonstrate a precedent?
We don’t need individuals to be able to access the financial data; we simply need full disclosure to the onshore jurisdictions by the mickey mouse microstates
What goes on in other offshore jurisdictions is not the business of onshore nosey parkers!!!
Jersey and Guernsey has its own Government. It has its own laws and it has its own protocol.
The idea that the Island has no idea what Trusts are in teh Island is one of the daftest accusations I have heard in ages.
But I guess that like I said earlier, seeing as Richard Murphy and the Tax Justice Network have no teeth and no rights to demand such information from anywhere, it is hardly surprising people take no notice of them.
Matt
I don’t think RM has asked for everyone to be able to see other peoplles personal data, as you are suggesting. What he is asking is for such data to be available to apprpriate authorities. In the UK we have a form called 41G (Trusts), which you have to send to HMRC. It seems to me that by making a big fuss about something RM has’nt asked for, you are bringing your own position into disrepute
Matt
You can hardly say that no-one takes any notice of RM when you yourself have posted two comments on his blog. You are clearly taking quite a bit of notice!
It’s not quite right to say that RM has no right to ask about other countries laws? The essence of laws in proper countries is that they are in the public domain.
Why are you so coy about telling us about the legislation in question?
It’s easy to accuse people of being daft But the tale of the emperor’s new clothes comes to mind.
Not only is the emperor in the altogether but his so is his tailor…
As for Jersey, Guernsey etc being sovereign this is eyewash. Sovereignty in these places is derived from the British Crown. Nor are Parliament and the States of Jersey co-equal under the Crown; London could turn the Channel Islands into part of metropolitan Britain overnight if it chose to do so.
If the Trust is outside the scope of UK taxation in the first place there is no case to answer.
London could turn the Channel Islands into part of metropolitan Britain overnight if it chose to do so.
and the US could turn the world into a Radioactive cesspool over night, your point is?
You sound like Gladstone, “send in the fleet!”
Under Jersey Trust Law 1984, there is no statutory or legal right to notify the Jersy goverment of a trust’s existence.
But all trustees still have to maintain proper records and complete full Due Dilligence on all Settlors and Beneficiaries as well as the provinence of funds.
Unless the uk resident settlor retains powers over the trust any distributions to UK resident benficiaries are taxable in the UK, and are the beneficiaries responsibilty to report. If HMCE don’t trust people why did they bring in “Self assessment”
While the UK might like to look inside everyone draws, have CC cameras in peoples homes, and taps on everyone’s phones, there is such a thing as privacy.
Anyway the UK govs use of a law brought in only for use against terrorists to freeze funds of a foreign bank for only protectionist purposes, really shows they cannot be trusted with any power.
PS most offshore financial centres (like Cayman) do report all companies and trusts to a self regulating central body.
“What goes on in other offshore jurisdictions is not the business of onshore nosey parkers!!!
Jersey and Guernsey has its own Government. It has its own laws and it has its own protocol.”
By that logic, Jersey should not be adopting secrecy policies which undermine the policy and protocol of other onshore jurisdictions.
“The idea that the Island has no idea what Trusts are in teh Island is one of the daftest accusations I have heard in ages.”
You say it is daft, but where is your contrary evidence?
The other thing is that Richard headlines this thread “Tell “US” the trust”. Who is “US”? I have to ask what authority is “US”, what legal capacity and muscle has “US” and what business is it of “US”.
I can imagine any queries coming from any unqualified body asking questions will only get a door in the face everytime.
How long has the Tax Justice Network been going and what are the success stories of their work to date? If you don’t mind me asking, because I think it is pertinent.
Sorry I meant the truth not ‘trust’.
Possibly not to the Inland Revenue, but the American IRS might be interested… 😀
The point is that if there is full disclosure to onshore jurisdictions the mainland authorities will be in a position to decide for themselves whether the trust is merely an elaborate construct designed to avoid/evade tax. The will know who owns what, how much profit they made and the origin of the funds
They could then say to X Corp or Mr X You made X million in profits in our jurisdiction and are liable to x% of that in tax to us because the actual economic activity that gave rise to those profits took place on our territory. Pay up boyo…
Of course that’s the end of Jersey. But guess what? If the rich use public roads or the NHS or employ workers educated and trained at the taxpayer’s expense but refuse to pay their share in paying for the public sector they are free riding on the rest of us. It’s no better than benefit fraud, and vastly more expensive for those of us who work hard, play by the rules and pay our share of taxation.
It is inevitable that taxes will have to go up at some point to pay down the debt run up by the boys playing funny money games in the City and on Wall Street. If corporate welfare bums think the working middle class is going to bail out the banks, watch those responsible for the mess dodge their taxes, move their money offshore and then buy up OUR properties and OUR failed businesses at the bottom of the recession for a song they can think again.
Why should full disclosure be allowed, there is such a thing as privacy. Many trust have no british resident beneficiaries or settlors, so why should the HMCE have access?
If the Vietnam government said they wanted access to all your bank accounts details, finger prints, family details, you would not give them to them would you Offshore Pirate.
It is always up to the individual to report there own taxes in the UK, that is why it is called Self Assessment. (pretty self explanatory)
And you really need to learn the distinction between tax evasion and tax avoidance, go on look it up.
Just add wht I posted on a previous thread:
Except proper tax avoidance is not illegal, and anyone can try to minimise there tax if the laws allow. Infact it’s their fundamental right to do so. Do you use your Personal allowance? carry forward any Capital losses, take off any job expenses or subscriptions then that’s tax avoidance and you’re doing it.
I strongly disagree that it is the offshore trust company to ensure that it’s clients are being tax compliant in their own country of residence or citizenship (in the case of the US). After all most of there countries rely on Self Assessment.
And mostly all reputable offshore FC’s have tax treaties and information sharing with onshore countries when they request it as well as having stronger Due diligence and more regulation governing even opening accounts onshore. Hell you can open a Delaware (OPs that’s in the USA) bank account via the internet with little verification.
Of course Cayman is one of the few countires that don’t recognise income and CG tax evasion as a crime, as neither tax exist there. Dual criminality, after all the US have never arrested a Caymanian for Gambling in Vegas, but it is illegal for them to do so under Cayman Laws.
Tax planning is not illegal for starters and I would like to know what American business is in the channel Islands because I have not heard of any. The other thing is as mentioned before, what POWER has the Tax Justice Network got to even request information, never mind demand it. We get John Christensen coming over a lot but nobody is interested in his views. He lives in the UK and how people do their financial affairs is frankly none of his business. When you try to dictate to another jurisdiction they will just slam a door in your face all the time. Austin Mitchell is starting to find this out now. I just want to know what teeth the TJN have, because I cannot see any. And making up lies about the Channel Islands just shows that they are desperately trying to entice the Islands into response. I hope you see my point. This is not an argument, just an observation, because the more I read by the TJN I am starting to realise that they have very little voice at all simply because they have no power.
Some material on this blog is interesting though on other financial matters.
[…] has been a great deal of traffic, and a lot of comments on this blog over the last day or two about whether the UK car or any other major developed nation […]
Matt
Of course TJN have no power. What do you think the TJN is? A department of the UK government? They are a research body. People asking questions that other people find inconvenient to ask. As an honest UK taxpaying citizen, I am not happy that other people are not fulfilling their duties in this country. I am also annoyed that another jurisdiction subsidised by the UK out of my taxes is aiding and abetting them to do this. By the way, i don’t think we are talking about tax planning here but but actual evasion using the secrecy on offer in Jersey. We are talking about people evading UK taxes and then hiding their gains elsewhere. That’s before we get onto the advantages that secrecy jurisdictions offer to “real” criminals and to flight capital from the third world.
Dearest Matt
You claim that ‘it is hardly surprising people take no notice of them’ can’t be left unanswered. WE DO NOTICE…and ARE taking action against thives who use trusts registered in the ‘muddy little islands’ to hide their ill-gotten gains at the expense of the people they claim to serve.
Developing countries will eventually force the closure of these havens…there’s a new world dawning…wake up, Sir.
Creg,
If the Vietnamese government had sufficient evidence to believe that I had been engaged in evading taxes in Vietnam, by use of financial facilities in the UK, I would hope the UK authorities would co-operate with their enquiries.
And let’s be realistic, we are talking about evasion here, and not avoidance. Evasion like http://nds.coi.gov.uk/content/detail.asp?NewsAreaID=2&ReleaseID=318648 for example, or like http://www.manchestereveningnews.co.uk/news/s/1024144_aleef_bosses_jailed_for_fraud . Hard evidence exists to show financial institutions in off-shore havens are used to facillitate fraud, and that the secrecy which surrounds those havens allows that fraud to take place.
The fact that a tax system may work on the basis of self assessment is entirely irrelevant to the debate – there’s not a tax system in the world that doesn’t acknowledge that what’s declared under self assessment has to be subject to checks or inspection by the relevant authorities – unless you’re suggesting that world governments should be just accepting whatever appears on a tax return?
What Mr Murphy is campaigning for is open-ness and accountability to allow all governments to ensure that they are receiving the revenues due to them under law. As it stands, that open-ness does not seem to exist.
And incidentally, TJN have the right to ask whatever they like, as does anybody. People are fully within their rights not to answer the TJN’s questions – what’s under debate is whether or not, tax havens should be able to allow the concealment of the truth from legitimate authorities the world over.
“tax havens should be able to allow the concealment of the truth from legitimate authorities the world over.”
Nor do they, as I have already stated that nearly all reputatable OFC’s have information “sharing” (as it’s essentally information giving, no) when the tax jurisdiction directly requests the information.
So in your Vietnamese example the OFC’s would also give Vietnam this information when directly asked. So no different from the Uk so what is your point?
And we ARE talking about tax planning, all my clients have tax advise, and declare there taxes to the best of my knowledge. They use OFC to leaglly minimise their tax bill, which is their right. If you found out you had paid too much tax, you would expect a rebate.
We adhere to all the “onshore” rules, like QI rules and the EUSD.
PS does the UK keep records of all the world wide income of it’s resident nondoms and share that information.
Creg
I have to challenge your last comment. It is almost wholly untrue. A tiny number of tax havens do have tax information sharing agreements but they are almost meaningless. For example, it is widely believed that the agreement between the USA and Jersey, which has been in place for a lot longer than most, has been used just four times. In that case these are political cover for the shenanigans which take place within tax havens and offer no meaningful exchange of information.
To suggest that a country like Vietnam can request information from a tax haven is absolutely absurd. Chile, a country of somewhat higher repute within the international environment, asked all of the countries on the OECD original blacklist if they would enter into information exchange agreements with it. All refused. Or more correctly, most simply ignored the request and those that did reply refused.
You wholly misrepresent the situation.
But I do entirely agree with you about the failure of the UK to maintain records on its northern side individuals. However you should have noticed that I had been one of the leading campaigners to reform this law and abolish the domicile rule. I have no advice with regard to the issues I address. The UK has problems it must reform, as does the USA.
Richard
I disagree, the avenue exists, if it has only be used 4 times, that is not Jersy’s fault, but the US for not using it. After all the US negotiated the avenue themselves, then do not use it but sit back and complain.
In fact recently some jurisdictions have been more busy negotiating tax treaties than others, the BVI in particular.
The avenues are there
Creg
Again that is blatantly untrue and must be corrected.
For the USA to ask for information they basically have to know that a person does have absolute beneficial ownership of an account in a tax haven. They must also know in which bank that account is held, probably know the account number and might even need to know the precise transaction they are looking for before they receive confirmation that it has in fact taken place. This was confirmed to me by a senior investigator in the tax administration only last week.
In other words, tax information exchange agreements add almost nothing to the armoury of investigators, which is exactly why they are not used. Secrecy prevails. Bluntly, if you say otherwise you are not telling the truth.
Richard
Yet these are the agreements they signed and negotiated, if they wanted wider agreements they should agreed them in the first place.
If the police want a search warrent the have to convince a judge that there is sufficient evidence that their target comitted the crime. They can’t just search anyone house without permission. The same goes with tax information exchange agreements, of course of need some evidence to get further. In the US you are still innocent until proven guilty.
I not sure that links will work due to spam threat but lok at the OECD website http://www.oecd.org/document/33/0,3343,en_2649_201185_41570785_1_1_1_1,00.html
There have been 16 new Bilateral Treaties recently and 44 since 2000 with the Isle of Man leading, with 11 such pacts; Jersey has signed 10, Guernsey nine, the Netherlands Antilles four and the British Virgin Islands three.
If they are so useless and you say why are onshore countries signing them?
[…] make this observation because there have been some questions asked on this blog about the role of the Tax Justice Network, the power it might have, and any […]