Offshore accounts are making a pretty penny.
It seems yet another culprit of the tax avoidance scandal has been caught out! Property developer Michael Shanly failed to disclose a Swiss offshore account to HM Revenue and Customs and during a civil enquiry was found to owe HMRC around £1.5m. This was discovered when information about UK Taxpayers with HSBC bank accounts in Geneva was handed over to HMRC.
Property millionaire Michael Shanly who features on the Sunday times rich list, opened the account with his and his mother’s money. When his mother died he then closed the account and transferred all of the money to another bank to avoid paying the £430,000 due in inheritance tax.
Michael Shanly is one in a long line of people who have recently been found to have off shore bank accounts to avoid paying taxes on their earnings!
As publicly scrutinised by the Prime Minister himself, Jimmy Carr was one of the first to be named and shamed. David Cameron branded the tax arrangement that the UK Comedian used as “morally wrong”, but since David Cameron’s own family ran a network of offshore investment funds I don’t really think he has any room to talk.
Jimmy Carr was found to pay as little as 1% on his earnings by using a LEGAL scheme known as the K2 Scheme. The K2 tax scheme is understood to protect £168m a year from the taxman which is based in Jersey, with Jimmy Carr as its largest beneficiary. In the wake of this revelation Jimmy Carr has reportedly withdrawn from the K2 tax scheme remarking it as an error of judgement.
Ian Cameron, David Cameron’s Father, took advantage of a new climate of investment after all capital controls were abolished in 1979. Though entirely legal, the Cameron’s funds were set up in tax havens such as Panama City and Geneva, and explicitly boasted of their ability to remain outside UK tax jurisdiction!!! At the time of Ian Cameron’s death in late 2010 he left a fortune of £2.74m in his will, from which David Cameron received the sum of £300,000.
The structure employed by Cameron senior is now commonplace among modern hedge funds, which argue that offshore status can help attract international investors. UK residents would ordinarily have to pay tax on any profits they repatriated, and there is nothing to suggest the Cameron’s did not.
Nevertheless, the dramatic growth of such offshore financial activity has raised concerns that national tax authorities are struggling to pin down the worlds super-rich.
Cameron and other cabinet members have recently suggested that they would be willing to disclose their personal tax filings amid growing scrutiny following the budget, but this would only shed light on annual sources of income rather than accumulated wealth or inheritance.
HMRC offered many disclosure opportunities, two of which in 2008 and 2010, were Offshore Disclosure Facility and New Disclosure Opportunity for those with money in offshore accounts to come forward and pay anything that was due on their money. These together raised almost £500m.
The undecided future of such accounts means that many of the UK’s super-rich will unfortunately continue to avoid the UK’s tax jurisdiction!