Comments on: The end of the Isle of Man as a banking centre? http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/ Richard Murphy on tax and corporate accountability Fri, 09 Jan 2009 23:12:33 +0000 http://wordpress.org/?v=2.6 By: Barrie Stevens http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-511351 Barrie Stevens Tue, 11 Nov 2008 09:40:14 +0000 http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-511351 The Isle of Man is being quietly cast loose to fend for itself by way of subtle changes to the long-standing constitutional and fiscal relationship. Change to the Customs and Excise Agreement, which accounts for 80% of Isle of Man Government income, may now see it terminated with two years notice either side. No longer loaded artificially in favour of the Isle of Man, it is now based upon the performance of both UK and Island economies and, it is admitted, will create a hard to fill void in future revenues. Should the UK threaten to cast loose then that two years notice serves to give the Island time to adjust to the probably irreplaceable loss of government income and for the metropolitan power to fulfil its "good government” obligations. Then there is the ending of the mutual health agreement by way of NHS reciprocity and charging to Island funds for off-Island treatments. Many years ago the Island withdrew its portion of National Insurance funds from the UK national scheme and invested them together with subsequent Manx contributions. Recent years had seen the Island receive devolved powers from the UK to enter into a series of Tax Information Exchange Agreements with other countries including the UK. The EU Savings Directive, together with its disclosure-cum-withholding tax options, is now about to be tightened up supported by a mysterious comment regarding "incentives”. Attempts at changing the Protocol 3 relationship with the EU via the UK failed. The Island is “in” for trade and “out” for anything else including most of its Finance Sector Services. Brussels and the UK do not want the Island inside the EU unless absorbed into a federally devolved Britain within a “Europe of the Regions”. The Island is too small a non-productive offshore-liability to be of value to the EU standing alone and does not have the capacity to meet EU acquis communitaire obligations. The International Identity Agreement accorded by the UK acknowledges that the Island has an international profile divergent from the metropolitan power within a changing constitutional relationship. Latterly, the UK has seized hundreds of millions of pounds formerly deposited with Icelandic controlled bank KSF (IOM) Ltd under the pretext that possession is nine points of the law. The Chief Minister now admits that this money is most probably irrecoverable. The UK Chancellor declares that there is no obligation to secure KSF (IOM) LTD clients, that if the UK did so it would not be done lightly but commensurate with a review of the Island’s tax and regulatory relationship with the UK. Would the Island’s establishment agree to KSF investors being compensated at the price of UK interference with internal taxation and fiscal autonomy? If the UK does not return the funds, or compensate KSF investors in view of Isle of Man Government’s evident powerlessness, then the Finance Sector is effectively finished and the Island made vulnerable to politically enforced change from London and Brussels. “Catch 22!” Barrie Stevens. 4, Leigh Terrace, Douglas, Isle of Man. The Isle of Man is being quietly cast loose to fend for itself by way of subtle changes to the long-standing constitutional and fiscal relationship.

Change to the Customs and Excise Agreement, which accounts for 80% of Isle of Man Government income, may now see it terminated with two years notice either side.

No longer loaded artificially in favour of the Isle of Man, it is now based upon the performance of both UK and Island economies and, it is admitted, will create a hard to fill void in future revenues.

Should the UK threaten to cast loose then that two years notice serves to give the Island time to adjust to the probably irreplaceable loss of government income and for the metropolitan power to fulfil its “good government” obligations.

Then there is the ending of the mutual health agreement by way of NHS reciprocity and charging to Island funds for off-Island treatments.

Many years ago the Island withdrew its portion of National Insurance funds from the UK national scheme and invested them together with subsequent Manx contributions.

Recent years had seen the Island receive devolved powers from the UK to enter into a series of Tax Information Exchange Agreements with other countries including the UK.

The EU Savings Directive, together with its disclosure-cum-withholding tax options, is now about to be tightened up supported by a mysterious comment regarding “incentives”.

Attempts at changing the Protocol 3 relationship with the EU via the UK failed. The Island is “in” for trade and “out” for anything else including most of its Finance Sector Services.

Brussels and the UK do not want the Island inside the EU unless absorbed into a federally devolved Britain within a “Europe of the Regions”. The Island is too small a non-productive offshore-liability to be of value to the EU standing alone and does not have the capacity to meet EU acquis communitaire obligations.

The International Identity Agreement accorded by the UK acknowledges that the Island has an international profile divergent from the metropolitan power within a changing constitutional relationship.

Latterly, the UK has seized hundreds of millions of pounds formerly deposited with Icelandic controlled bank KSF (IOM) Ltd under the pretext that possession is nine points of the law. The Chief Minister now admits that this money is most probably irrecoverable.

The UK Chancellor declares that there is no obligation to secure KSF (IOM) LTD clients, that if the UK did so it would not be done lightly but commensurate with a review of the Island’s tax and regulatory relationship with the UK.

Would the Island’s establishment agree to KSF investors being compensated at the price of UK interference with internal taxation and fiscal autonomy?

If the UK does not return the funds, or compensate KSF investors in view of Isle of Man Government’s evident powerlessness, then the Finance Sector is effectively finished and the Island made vulnerable to politically enforced change from London and Brussels. “Catch 22!”

Barrie Stevens. 4, Leigh Terrace, Douglas, Isle of Man.

]]> By: Tax Research LLP http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-505325 Tax Research LLP Fri, 24 Oct 2008 13:12:25 +0000 http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-505325 Jim Yes, some products are legal But the whole structure is corrupt: not the tax rate, the Isle of Man can do what it likes with that. What is corrupt is the deliberate structure of secrecy and non-cooperation that allows people to abuse that tax rate. And anyone who knows anything about the Isle of Man who denies that its banks are knowingly used to evade tax is naive, stupid or worse. The evidence is overwhelming that they are, and knowingly so. Richard Jim

Yes, some products are legal

But the whole structure is corrupt: not the tax rate, the Isle of Man can do what it likes with that. What is corrupt is the deliberate structure of secrecy and non-cooperation that allows people to abuse that tax rate.

And anyone who knows anything about the Isle of Man who denies that its banks are knowingly used to evade tax is naive, stupid or worse. The evidence is overwhelming that they are, and knowingly so.

Richard

]]> By: Barrie Stevens http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-505230 Barrie Stevens Fri, 24 Oct 2008 08:27:54 +0000 http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-505230 Jim Hello! I am absolutely not a financial or legal practitioner. I have just been a close observer of the Manx scene and been invited at times as a guest on Manx Radio current affairs slots "Sunday Opinion" and "Perspective" having many hundreds of letters published in the local papers..so Editors must think I have something valid to say?...I am advised that one can make these investments offshore and defer tax on interest until importing the funds back into the UK/returning to UK. I am not sure that this applies to savings accounts offshore. This may or may not be utilised by Expats. Consequently, it is possible to defer domestic income tax liability of say 40% and then come back into the fold as it were when either not working or retired and the tax liability is less according to the stage in your life when it counts as income...Now tell me please is this correct? If so then there are those who might say that it is legal but it comes under not tax evasion but tax "avoision". I would appreciate your advice on these points. Barrie Stevens. Douglas. Isle of Man. Jim Hello! I am absolutely not a financial or legal practitioner. I have just been a close observer of the Manx scene and been invited at times as a guest on Manx Radio current affairs slots “Sunday Opinion” and “Perspective” having many hundreds of letters published in the local papers..so Editors must think I have something valid to say?…I am advised that one can make these investments offshore and defer tax on interest until importing the funds back into the UK/returning to UK. I am not sure that this applies to savings accounts offshore. This may or may not be utilised by Expats. Consequently, it is possible to defer domestic income tax liability of say 40% and then come back into the fold as it were when either not working or retired and the tax liability is less according to the stage in your life when it counts as income…Now tell me please is this correct? If so then there are those who might say that it is legal but it comes under not tax evasion but tax “avoision”. I would appreciate your advice on these points. Barrie Stevens. Douglas. Isle of Man.

]]> By: Jim http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-505045 Jim Thu, 23 Oct 2008 22:19:43 +0000 http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-505045 There are postive provisions with UK Tax legislation to provide gross roll up for assets held within offshore bonds. This is not tax evasion, there are specific provisions within UK legislation. Could you please explain how people using these products are 'seeking to flee'? There are postive provisions with UK Tax legislation to provide gross roll up for assets held within offshore bonds.
This is not tax evasion, there are specific provisions within UK legislation.
Could you please explain how people using these products are ’seeking to flee’?

]]> By: Barrie Stevens http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-504382 Barrie Stevens Wed, 22 Oct 2008 08:15:17 +0000 http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-504382 DBThe Isle of Man does not have the world's oldest democratically elected parliament. Tynwald is undoubtedly of Viking descent but it was anglicised long ago. Even the House of Keys is not Manx. The original MHKs were in fact the present Coroner's assistants or Lockmen. The Anglo-Normans discovered these lawmakers of Viking descent called Lagman (Lawmen) and then Anglicised it to Lockmen and invented the collective noun Keys for a house of Lockmen. It is the same in Scandinavia and I got this from a Swedish lawyer on the Island. It is not Gaelic for the "The twenty four". The UK or Britain took over the sovereignty of the Island in 1760 and then created Tynwald Hill at Fairfield on a previous Neolithic site. The original Tynwald is some distance away and three are three others. The UK laid out the processional path and built the Chapel Royal at one end as part of the Anglican dominance associated with government. So Tynwald is very much a British constitutional ceremony. The House of Keys was appointed and not democratically elected until about 1865 at UK insistence on reform. Even then the Keys and Tynwald were not fully democratic until the 1920s-30s and for this see Manx Memories and Movements by Norris in the Manx Museum bookshop. There was no income tax in the Island until 1918 when the UK threatened to legislate over Tynwald's head a power which it still retains. The rich paid no tax and all taxes fell on the poor because there was only a sales and services tax. Despite Tax Information Exchange Agreements with the UK and elsewhere and EU Savings Directive/Withholding Tax the UK and other gatherer have no power to make direct tax garnishee on the Isle of Man and vice versa. I moved to the Island with a tax problem and the taxman gave up! I did eventually settle with them but not financially. I supplied information and they wrote the tax off. So you see that still makes it a tax haven! Barrie Stevens. 4, Leigh Terrace, Douglas. Isle of Man. DBThe Isle of Man does not have the world’s oldest democratically elected parliament. Tynwald is undoubtedly of Viking descent but it was anglicised long ago. Even the House of Keys is not Manx. The original MHKs were in fact the present Coroner’s assistants or Lockmen. The Anglo-Normans discovered these lawmakers of Viking descent called Lagman (Lawmen) and then Anglicised it to Lockmen and invented the collective noun Keys for a house of Lockmen. It is the same in Scandinavia and I got this from a Swedish lawyer on the Island. It is not Gaelic for the “The twenty four”. The UK or Britain took over the sovereignty of the Island in 1760 and then created Tynwald Hill at Fairfield on a previous Neolithic site. The original Tynwald is some distance away and three are three others. The UK laid out the processional path and built the Chapel Royal at one end as part of the Anglican dominance associated with government. So Tynwald is very much a British constitutional ceremony. The House of Keys was appointed and not democratically elected until about 1865 at UK insistence on reform. Even then the Keys and Tynwald were not fully democratic until the 1920s-30s and for this see Manx Memories and Movements by Norris in the Manx Museum bookshop. There was no income tax in the Island until 1918 when the UK threatened to legislate over Tynwald’s head a power which it still retains. The rich paid no tax and all taxes fell on the poor because there was only a sales and services tax. Despite Tax Information Exchange Agreements with the UK and elsewhere and EU Savings Directive/Withholding Tax the UK and other gatherer have no power to make direct tax garnishee on the Isle of Man and vice versa. I moved to the Island with a tax problem and the taxman gave up! I did eventually settle with them but not financially. I supplied information and they wrote the tax off. So you see that still makes it a tax haven! Barrie Stevens. 4, Leigh Terrace, Douglas. Isle of Man.

]]> By: Tax Research LLP http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-504342 Tax Research LLP Wed, 22 Oct 2008 06:11:46 +0000 http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-504342 DB My comments were not meant to be amusing: they are intended to stop abuse For more information search Google for Creating Turmoil Tax and you'll find a full explanation in the resulting publication - or search this site for the same thing Richard DB

My comments were not meant to be amusing: they are intended to stop abuse

For more information search Google for Creating Turmoil Tax and you’ll find a full explanation in the resulting publication - or search this site for the same thing

Richard

]]> By: Expat13 http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-504140 Expat13 Tue, 21 Oct 2008 19:53:36 +0000 http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-504140 Many KSF Depositors like myself had their savings temporarily deposited with Derbyshire Offshore the offshore arm of the Derbyshire Building Society when they decided to sell out to KSF IOM. Many KSF Depositors like myself had their savings temporarily deposited with Derbyshire Offshore the offshore arm of the Derbyshire Building Society when they decided to sell out to KSF IOM.

]]> By: DB http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-504112 DB Tue, 21 Oct 2008 18:03:49 +0000 http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-504112 Sorry but I don't find your comments amusing I actually find you are a blinkered pedant and I stand by the comments regarding your particular dislike of the Isle of Man. How exactly do offshore centres set out to undermine the democratic process? The IOM in particular is the oldest democratically elected Parliament in the world. UK tax law allows UK residents to legitimately hold assets offshore providing they are declared. Virtually all offshore structuring is within the law otherwise HMRC would (and will) act. The IOM & Channel Islands banking system funnels virtually all its money back onshore to be lent out by UK parents so they assist the UK banks in the cheap raising of capital from non-domestic markets. No doubt you'll get back on to your favourite hobby horse being VAT - which Manx residents pay on everything and which is shared with the UK. Sorry but I don’t find your comments amusing I actually find you are a blinkered pedant and I stand by the comments regarding your particular dislike of the Isle of Man. How exactly do offshore centres set out to undermine the democratic process? The IOM in particular is the oldest democratically elected Parliament in the world. UK tax law allows UK residents to legitimately hold assets offshore providing they are declared. Virtually all offshore structuring is within the law otherwise HMRC would (and will) act. The IOM & Channel Islands banking system funnels virtually all its money back onshore to be lent out by UK parents so they assist the UK banks in the cheap raising of capital from non-domestic markets. No doubt you’ll get back on to your favourite hobby horse being VAT - which Manx residents pay on everything and which is shared with the UK.

]]> By: Barrie Stevens http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-503531 Barrie Stevens Mon, 20 Oct 2008 10:54:44 +0000 http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-503531 I am advised by one personally concerned with the KSF (IOM) Ltd collapse as follows. ‘Your postings are not so much 'facts' as your own personal spin on the situation. There's a huge amount of innuendo in what you've posted, and some of it is just plain factually wrong. The FSC was established in 1983, as a result of an enquiry ordered by Tynwald into the collapse of the Savings and Investment Bank. The enquiry was conducted by officials from the Bank of England, who were paid by the Isle of Man Government. That is not unusual - the Crown Dependencies often commission official advice and inspections from the relevant UK bodies, as it's the easiest place to buy the relevant expertise. The FSC was established by Act of Tynwald, not because of any pressure from the UK. The commission members are appointed by Tynwald following nominations by the Manx Treasury. They can be removed by Tynwald. This makes them independent of the Chief Minister and the Government, in that they answer to Tynwald only. In no way is the FSC appointed by or answerable to the UK government.’ The above was posted as a response to my posting on the KSF(IOM) Ltd depositors united action website. I disagree that there was not behind the scenes pressure from the UK on the matter of establishing the FSC and it, the UK, does act like some US Federal Marshall in small-town America. The Channel Islands came under the same suggestive force from the metropolitan power and have their FSC equivalents. I prefer to think that the UK does in fact exert a great deal of behind-the-scenes power if not force. Likewise, it cannot be denied that the Isle of Man Financial Supervision Commission did not arrest or detain the KSF (IOM) Ltd funds in the Isle of Man for safekeeping but instead chose to send them to London so as to prevent them being sent to Iceland. I suggest that this smacks of UK influence as borne out by the turn of events. Perhaps the FSC has no power of seizure and detention of finds on the Island? It clearly has power to order the funds away out of the Isle of Man and into UK jurisdiction. “Curioser and curioser”. The consequence has been that depositors in the Isle of Man, who should have been protected by the FSC, have seen their moneys sent out of Isle of Man Government jurisdiction and regulation to the capital city of the metropolitan power where they may well yet end up being used to offset any losses incurred by UK entities in the face of Icelandic default, or at least, long-term delay in reaching an effective settlement. Barrie Stevens. 4, Leigh Terrace, Douglas, Isle of Man. I am advised by one personally concerned with the KSF (IOM) Ltd collapse as follows. ‘Your postings are not so much ‘facts’ as your own personal spin on the situation. There’s a huge amount of innuendo in what you’ve posted, and some of it is just plain factually wrong. The FSC was established in 1983, as a result of an enquiry ordered by Tynwald into the collapse of the Savings and Investment Bank. The enquiry was conducted by officials from the Bank of England, who were paid by the Isle of Man Government. That is not unusual - the Crown Dependencies often commission official advice and inspections from the relevant UK bodies, as it’s the easiest place to buy the relevant expertise. The FSC was established by Act of Tynwald, not because of any pressure from the UK. The commission members are appointed by Tynwald following nominations by the Manx Treasury. They can be removed by Tynwald. This makes them independent of the Chief Minister and the Government, in that they answer to Tynwald only. In no way is the FSC appointed by or answerable to the UK government.’ The above was posted as a response to my posting on the KSF(IOM) Ltd depositors united action website. I disagree that there was not behind the scenes pressure from the UK on the matter of establishing the FSC and it, the UK, does act like some US Federal Marshall in small-town America. The Channel Islands came under the same suggestive force from the metropolitan power and have their FSC equivalents. I prefer to think that the UK does in fact exert a great deal of behind-the-scenes power if not force. Likewise, it cannot be denied that the Isle of Man Financial Supervision Commission did not arrest or detain the KSF (IOM) Ltd funds in the Isle of Man for safekeeping but instead chose to send them to London so as to prevent them being sent to Iceland. I suggest that this smacks of UK influence as borne out by the turn of events. Perhaps the FSC has no power of seizure and detention of finds on the Island? It clearly has power to order the funds away out of the Isle of Man and into UK jurisdiction. “Curioser and curioser”. The consequence has been that depositors in the Isle of Man, who should have been protected by the FSC, have seen their moneys sent out of Isle of Man Government jurisdiction and regulation to the capital city of the metropolitan power where they may well yet end up being used to offset any losses incurred by UK entities in the face of Icelandic default, or at least, long-term delay in reaching an effective settlement. Barrie Stevens. 4, Leigh Terrace, Douglas, Isle of Man.

]]> By: Barrie Stevens http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-503504 Barrie Stevens Mon, 20 Oct 2008 09:19:10 +0000 http://www.taxresearch.org.uk/Blog/2008/10/12/the-end-of-the-isle-of-man-as-a-banking-centre/#comment-503504 BD I think what Mr Murphy actually meant was that the Isle of Man compensation scheme is really rather ineffectual so as make the Island just like the other small jurisdictions for practical purposes. For instance, in an aside on the Isle of Man Today website, one of the senior Financial Supervision Commission officials drops the bombshell that not all of the banks and building societies recruited into the Depositors Compensation Scheme (DCS), now proffering 100% of up to £50,000 in time, are big enough to be able to afford the £500,000 annual levy or contribution to the settlement fund. In other words, we were wrongly informed. The DCS is not funded by a £500,000 annual levy on specified banks following a collapse. It is funded by a levy of.....up to £500,000 on those banks that can afford it.....How many are in the premier league? We are not told. Not quite so kosher as before is it? Offshore banks pleading poverty! Barring a miracle buyer together with the recovery of funds frozen in London, KSF (IOM) Ltd may well go into liquidation this Friday and according to Alan Bell Treasury Minister, as the DCS runs from April to April it should be possible to raise some funds for the scheme. Assuming that the banks can afford it! Allan Bell is also not over-confident of recovering some £2.70 million of Isle of Man Government funds lodged with the bank. Considering the potential sums outstanding this is rather like the Church levying the charge of “Peter’s Pence” in order to fund the building of St Peter’s Basilica in Rome. Not all of that money found its way to Rome. Some was diverted to build London’s St. Paul’s Cathedral. Hence, “Robbing Peter to pay Paul”. How apt! Barrie Stevens. 4, Leigh Terrace, Douglas, Isle of Man. BD I think what Mr Murphy actually meant was that the Isle of Man compensation scheme is really rather ineffectual so as make the Island just like the other small jurisdictions for practical purposes. For instance, in an aside on the Isle of Man Today website, one of the senior Financial Supervision Commission officials drops the bombshell that not all of the banks and building societies recruited into the Depositors Compensation Scheme (DCS), now proffering 100% of up to £50,000 in time, are big enough to be able to afford the £500,000 annual levy or contribution to the settlement fund. In other words, we were wrongly informed. The DCS is not funded by a £500,000 annual levy on specified banks following a collapse. It is funded by a levy of…..up to £500,000 on those banks that can afford it…..How many are in the premier league? We are not told. Not quite so kosher as before is it? Offshore banks pleading poverty! Barring a miracle buyer together with the recovery of funds frozen in London, KSF (IOM) Ltd may well go into liquidation this Friday and according to Alan Bell Treasury Minister, as the DCS runs from April to April it should be possible to raise some funds for the scheme. Assuming that the banks can afford it!
Allan Bell is also not over-confident of recovering some £2.70 million of Isle of Man Government funds lodged with the bank. Considering the potential sums outstanding this is rather like the Church levying the charge of “Peter’s Pence” in order to fund the building of St Peter’s Basilica in Rome. Not all of that money found its way to Rome. Some was diverted to build London’s St. Paul’s Cathedral. Hence, “Robbing Peter to pay Paul”. How apt! Barrie Stevens. 4, Leigh Terrace, Douglas, Isle of Man.

]]>