Who uses the UK tax havens
Jim Ratcliffe has had a very impressive career in entrepreneurship. The 66-year-old grew up in a social building in the north of England. Today he is the richest Briton, thanks to the chemical company Ineos, which he founded. Prince William knighted him in the summer for his services to business and investment. However, this does not prevent Sir Jim from moving to the Principality of Monaco together with two other major Ineos shareholders from the United Kingdom. These plans became known two months after the accolade.
Monaco is a tax haven, and according to media reports, the three extremely wealthy Ineos owners are working with the consulting firm PwC on concepts to legally create shares out of the sphere of influence of the British tax authorities. That should save up to four billion pounds in taxes - an enormous sum. PwC found this assignment so delicate that the company was evidently considering abandoning the mandate. An Ineos spokesman says that the company and its owners naturally abide by all tax laws.
But if you have the right adviser, you can abide by all the laws and still save properly: by moving property to tax havens or - better still - becoming a tax citizen of these countries yourself instead of living under the thumb of the British tax authorities. According to research by the daily newspaper The Times 28 of the UK's 93 billionaires, almost one in three, are exempt from UK tax because they have moved to, or are in the process of moving to, cheaper rate countries. Monaco, Switzerland and the islands in the English Channel are the most popular as a tax home. The super-rich remain British citizens and are allowed to spend time in the Kingdom, but are considered foreign nationals by the tax authorities. Almost half of the 28 tax emigrants only moved in the past ten years.
Another result of the research is particularly tricky for the ruling conservatives: According to this, the tax refugees donate heavily to the Tories; In the three months leading up to the 2017 general election, Britons transferred a total of a good £ 1 million from tax havens to Prime Minister Theresa May's party. A 2009 law prohibits people who are not taxpayers in the UK from making donations to parties of more than £ 7,500. However, this law has not yet come into force. How convenient for the government. Margaret Hodge, an MP for the opposition Labor party, describes it as "obscene" that tax haven residents "influence British policy with donations".
Crown possessions like the Isle of Man are supposed to provide better information than Germany
The revelations come at an inopportune time, as May is already under criticism for her dealings with tax havens. A cross-party group in parliament wants to force the so-called crown possessions of the royal family to be more open. These crown estates - the Isle of Man in the Irish Sea and the English Channel islands of Jersey and Guernsey - make big bucks as post box company locations.
Not all letterbox companies in tax havens are used to hide money, be it from the tax authorities, the police or the divorced wife. But some do. This is shown, for example, by the revelations in the "Troika Laundromat" papers, the Panama and Paradise Papers. In a motion, the MPs therefore demand that the islands set up a register of company owners that can be viewed by everyone by 2020.
The island governments reject this and point out that they are helping foreign tax and investigative authorities with inquiries anyway. The crown estates have their own parliaments, but London is responsible for foreign and defense policy. Prime Minister May does not want to force the islands to do anything, especially since it is highly doubtful whether London can even regulate tax policy on them. However, May's majority in the lower house is small; the head of government feared defeat. Therefore, she postponed the parliamentary debate on the motion without further ado - to the indignation of the MPs.
EU countries had to introduce such registers of beneficial owners by 2017; this was provided for by the Brussels money laundering directive. The set of rules gave the federal states the choice of whether to make the data collections accessible to everyone or only to authorities. Not everyone is allowed to search the German transparency register. In the UK, on the other hand, the information is freely available. This helps organizations such as Transparency International or Network Tax Justice, which fight against corruption and tax evasion. According to the will of the parliamentarians, the crown possessions should establish just such an open register. The Isle of Man would then be a worse hiding place for money than Germany.
Parliament decided last year to force the British overseas territories to set up registers that can be viewed by everyone. The overseas territories include the British Virgin Islands, a popular hiding place for money. The status of these areas differs from that of the crown possessions, which is why the encroachment on London raised fewer constitutional problems. The House of Commons gave the overseas territories until the end of 2020. After bitter protests from these areas, the government extended the deadline to 2023.
So the conservatives are very understanding towards tax havens. But such oases are also home to loyal and generous party donors.
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