There’s a letter in The Times this morning which in the interests of public debate I am going to reproduce in full:
Sir, Despite Clive Stafford Smith’s eminence as a lawyer, his proposed solution to the “kerfuffle” surrounding non-doms lacks the simplicity that he implies (“Just pay up in full”, letter, Mar 8).
US citizenship is clearly the citizenship of a single federal state that is entitled to tax its nationals as it so wishes. By contrast, those holding British citizenship include people from the Channel Islands and the Isle of Man, which are separate historic jurisdictions that are not represented in the UK Parliament but have their own governments and legislatures.
The people of Jersey have, for the past millennium, shown loyalty to their sovereign while claiming the right to not be subject to any form of taxation to which they had not consented. It would surely not be “fair enough” from a constitutional perspective either to seek to override the ancient rights and privileges enjoyed by islanders or to consider them any less British.
Gregory G. P. White
Advocate of the Royal Court
Saint Helier, Jersey
Clive Stafford Smith is, I admit, one of my heroes — a man who has dedicated himself to saving those on death row.
And Geoffrey White is a lawyer who works in a cowardly island that is a secrecy jurisdictions - which are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.
If evidence is needed of my claim see what he’s written. No, he’s saying to the UK, you can’t charge fair taxes because we’re going to stop you.
But he ignores the solution (of course). That is that the real people of Jersey — those with Jersey issued passports — could be exempted from this charge if that was considered desirable and appropriate.
But he does not seek to suggest that obvious and easy solution. He just uses his ‘Britishness’ to undermine the UK’s tax system and necessary reforms to it to make it more effective — not least by ensuring tax is paid by those who avail themselves of the services of the Jersey finance industry and its tax exile offering.
It's time professional people changed their tune: their duty is to support tax systems - not undermine them.
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Richard
Your reference to the issuing of British passports is incorrect. The mere fact that the passport is issued from Jersey has no effect whatsoever on the status of the passport. For example, if you go to Jersey on holiday and apply whilst there to have your British passport renewed, even if you have no residential or other connection with Guernsey, then that is your absolute right. The office of the Lieutenant-Governor in Jersey is, for immigration purposes, merely acting as an agent of the UK Government. It is exactly the same passport which will be issued, other than the front cover states that it was actually issued on behalf of the UK government in Jersey.
Similarly, if a Jersey resident applies to have his passport renewed whilst visiting the UK, then he can go to the UK passport office and will get the same passport that he would have got in Jersey, but without the reference to state that it was issued in Jersey.
If the applicant has no parents or grandparents who were born in the EU, then the very same restriction on that individual’s automatic right to reside and work in the EU will appear, regardless of whether the passport is issued from Jersey or from the UK.
As you will no doubt appreciate, there are tens of thousands of Channel Islanders who have either at least one parent or grandparent who was botn in the UK or elsewhere in the EU, thereby entitling them to a full UK passport without the restriction. Indeed, the number of people who are affected by this restriction is rapidly dwindling, as I guess one would expect in this day and age.
The fact is that, constitutionally, the Channel Islands and the Isle of Man are part of the Common Travel Area for immigration purposes only. Trying to link British passports with UK taxability is not possibility.
Its also worth pointing out that a British citizen is “British”, and not “UK”. The constitutional taxing body of HMRC is that of the UK, and not of Great Britain or the British Isles, which is not the same thing.
Never heard of him and he doesn’t crop up on Google.
Mind you, I can’t see what is objectionable about what he says. There are a lot of people that hold british passports that have no rights in Britain: I can’t vote, get free healthcare, UK scale university fees, UK pension etc. I can’t even work in the EU.
So its not clear to me why the presumption is that I should pay UK tax.
And if a “secrecy jurisdiction” is somewhere that has a “legally backed veil of secrecy” then Jersey is no more a secrecy jurisdiction that any other country that upholds client confidentiality. It’s approach mirrors EXACTLY UK caselaw.
Perhaps you can list the countries in the world which do not have confidentiality rights.
One country: should be easy.
One single country where a bank can release the details of any client to any person for any reason without penalty.
Come on Richard, where can I access details about your personal bank accounts? Or can I assume you bank somewhere that has a legally backed veil of secrecy? Because, perhaps, there are no other places.
@Rupert
Looks like you guys are going to have problems then
My discussions in the profession suggest my quiet campaign for a citizenship basis for taxation will have been successfully concluded within a few years
Not yet
But inevitably is the belief
But by then it won’t be a problem. The Crown Dependencies will all be bust anyway
Richard
@mad foetus
MF
You know I’m not asking for your bank account on public record
You really don’t help your argument by being stupid
If you wish to be so your comments will be deleted
Add to the debate or don’t post please
Richard
Richard,
I’m just asking what you mean by “a legally backed veil of secrecy”. Jersey, Guernsey and the ise of Man follow the UK caselaw set out in Tournier et al.
The basic approach is that a bank owes a client a duty of confidentiality but can disclose information in 4 circumstances:
1) under compulsion of law
2) where there is a public duty
3) where the interests of the bank require it
4) where the customer consents.
What I am asking, quite simply, is that do you think this is a “legally backed veil of secrecy”? If so, what do you propose in its place and what steps areyou taking to change the UK caselaw (which the crown dependencies would follow automatically)?
And can you name one country in the world that in your view does not have a “legally backed veil of secrecy”?
I’m not being obtuse, just making the point that everyone safeguards confidentiality and there is a huge gulf between making it a criminal offence to breach that confidentiality (as is the case in some jurisdictions) and following UK caselaw.
But perhaps it is easier to call me stupid than answer a simple question: is there one jurisdiction in the world that, in your view, does not have a “legally backed veil of secrecy”?
@mad foetus
Again – you write complete nonsense that does you no credit
Deal with the issues, such as those referred to here
http://www.secrecyjurisdictions.com/PDF/FinancialTransparency.pdf
and here
http://www.secrecyjurisdictions.com/PDF/SecrecyWorld.pdf
Richard
I’ve just read “Jersey is not an obstacle to UK citizenship based taxation.” and also the comment from “Rupert” which says,
“…If the applicant has no parents or grandparents who were born in the EU, then the very same restriction on that individual’s automatic right to reside and work in the EU will appear, regardless of whether the passport is issued from Jersey or from the UK.
As you will no doubt appreciate, there are tens of thousands of Channel Islanders who have either at least one parent or grandparent who was botn in the UK or elsewhere in the EU, thereby entitling them to a full UK passport without the restriction. Indeed, the number of people who are affected by this restriction is rapidly dwindling, as I guess one would expect in this day and age.”
I have what we call “a rubbish passport” with the stamp in it despite having French (EU) connections.
My Mum’s family came from France and my uncle Marcel (Mum’s brother) was a soldier in the French army until France fell. He then joined the Resistance in France and was in charge of 10 men in the Maquis. They were eventually arrested and taken to Dachau. Marcel survived and became my godfather.
Lots of people in Jersey would like a full passport without the stamp in it. It’s very upsetting and insulting to have the stamp in our passports….and for what? To enable Jersey to carry on with its tax haven activity? Are we hostages to the tax haven?
Many younger people also have the stamp. Jersey puts up the argument that there aren’t many of us with these rubbish passports. My argument is that one would be too many.
“Lots of people in Jersey would like a full passport without the stamp in it. It’s very upsetting and insulting to have the stamp in our passports….and for what? To enable Jersey to carry on with its tax haven activity? Are we hostages to the tax haven?”
Pat,
It has nothing to do with the finance industry. Jersey passports have that restriction because Jersey is not a part of the EU. The finance industry would very much like Jersey to be part of the EU. But if Jersey did join the EU then it would have to allow any EU citizen to buy and live in property in Jersey. The authorities believe that the locals would not accept that.
But the reason why the stamp exists is to allow housing controls to continue on the Island.
MF
You really are writing nonsense here
Jersey is not a part of the EU because if it were it would have to have had VAT and refused it
And it would have to have massively improved its corporate disclosure requirements
And the requirements on tax would have been harsher
And it would have had human rights
And customer protection
And much, much else that is anathema to its finance sector
Please stop writing absolute nonsense
Richard
With regards to the passport issue, it would seem that not even Government House know what they are supposed to be doing!
If you are born in the Channel Islands, and live in Europe ( YES..DESPITE THE RACIST LAW ABOUT PASSPORTS..!) you need to apply to the Consulate in PARIS for any renewal of documents.
These kind Brits in Paris offer a very complete website with instructions on how to go about it. But and again but, if you are unlucky enough to be a Channel Islander the following applies: quote from Notes to FORM C1 (renewal application form),
” United Kingdom includes England, Scotland, Wales, Northern Ireland, the Channel Islands and the Isle of Man. The European Union (EU) provisions relating to the free movement of labour and the right of establishment do not apply to Channel Islanders and Manxmen unless they can show that they have a close connection with mainland United Kingdom through birth, descent, adoption, naturalisation, registration of residence. They may therefore, be asked for information to determine whether such a connection exists. Where it does not, the passport will be endorsed to the effect that the holder is not entitled to benefit from EU provisions relating to the free movement of persons and services” end of quote.
Maybe Government House can enlighten us why the European Consulate formula is different from the Jersey (CI) version, why is it that despite having EU born Parents I still have that ‘Yellow Star stamp’ on my passport?
Shame on the Jersey Politicians who allow such a discrimination of rights.
Joseph
Richard,
Your views are out of date. Go and speak to any of your contacts in the finance industry over here. The (not unanimous but definitely majority) view is that Jersey loses vast amounts of work to Luxembourg and Dublin as a result of being outside of the EU, while it has to comply with EU regulation (such as the EUSD, the prospectus directive etc).
Human Rights? Jersey of course passed Human Rights legislation before the UK but the UK withheld royal assent until it had brought its own Human Rights legislation into force. So don’t hold that against jersey.
Customer protection – can’t argue there, Jersey was very slow to bring any in but now has.
VAT was an issue in the past but I am sure you would agree that the Island authorities would like nothing more than to be able to introduce VAT at 15/20% and say that “we had no choice”. Its the easiest way of plugging the black hole you bang on about.
No, the main obstacle to Jersey joining the EU (assuming they would let us in) is the housing issue. And you know that I am likely to know.
Of course, it could be that if accession negotiations began an obstacle relating to the finance industry may crop up that prevents Jersey from joining, but none has been raised to date.
Richard
I don’t agree that its inevitable at all. But we can agree to differ on that. What I can say with absolute certainty though is that as somebody who was born in the Channel Islands, raised in the Channel Islands and who has lived and worked in the Channel Islands for 90% of my working life, and with no assets in the UK, I will never agree to pay UK tax just because I hold a British passport. I’m entitled to a French passport through ancestry and I’d rather take up that option. But I won’t lose too much sleep over it at the moment.
Pat Lucas
There are quite a few people who are wrongly holding the passport with the restriction on it. Let me explain why. Until 1972/1973, when the UK joined the EU, the question was worded differently on the passport application/renewal application. In those days you were asked whether you had a UK parent or grandparent who was born in the UK, just to make sure that you were properly entitled to a British passport.
Since 1972/73, the passport application/renewal application, which is only concerned with the right to a British passport, should have also asked whether you had a parent or grandparent born in the EU, and not just in the UK. There are lots of Channel Islanders who have a parent, or more likely a grandparent, born in France in particular, but the application form only used to ask about UK ancestry. You could respond “no” to the UK, but there wasn’t anywhere to disclose your French ancestry (understandable really as its not a French passport that you were applying for).
My understanding is that if you have French parentage or grandparentage then you are entitled to apply for a French passport which would enable you to work anywhere in the EU, but more importantly I think you are entitled to go to the Jersey Customs & Immigration Office, declare your French grandparentage and ask them to re-issue your British passport without the EU restriction included.
If your French ancestry in fact goes back to 3 generations, then unfortunately I don’t think that this option would be open to you. The “passport through ancestry” has only ever gone back to 2 generations – in your case its not clear, but if your uncle was French, then presumably his parents, and thus your grandparents, were also French.
Richard
Re your last response to Mad Foetus (#9), I would just like to say:
1) A GST/VAT is already in place in Jersey, and its clearly there to stay. It refused it previously, but its already in place.
2) Massively improved corporate disclosure requirements – you mean like Cyprus, Malta, Luxembourg and Gibraltar ?
3) Harsher tax requirements – we are going to get those even without being an EU member so that doesn’t seem relevant to the argument.
4) Human rights – well that’s inevitable anyway.
5) Customer protection – why shouldn’t we have that anyway ?
MF rightly points out that if we had EU membership then everybody with an EU passport would have an absolute right to take up residency and buy property in the islands. That is a huge issue as the population could easily then double within 10 years although I believe that there would be provisions to allow safeguarding against that. I also understand that even if we wanted to join the EU we wouldn’t be allowed to as we wouldn’t satisfy many of the economic criteria on grounds of size or population – I think I am right in saying that Cyprus (circa 800,000) and Malta (circa 400,000) are the two smallest EU member countries in terms of population, compared with Jersey (95,000) and Guernsey (62,000). So if we wouldn’t be allowed in to the club, and wouldn’t be allowed to benefit from being full members, why on earth would we want to put up with all of the practical issues of EU membership ? What’s in it for us ?
If you are suggesting that we are simply absorbed into the UK as a county then that will never, ever happen. The Channel Islands would do a UDI before that ever happened. Far more practical, for everyone’s sake, for Protocol 3 to the Treaty of Rome to be renegotiated to reach an appropriate resolution, with the Channel Islands retaining their independence but coming more closely aligned to the EU. That can only mean access to some benefits, but not all, and a commitment to some obligations, but not all. Give it 20 years and it may well happen. Before then, I doubt it.
@Rupert
I’m going to ignore much of what you have written – it is obviously absurd
I suspect you’re wrong on passports
You’ll note Iceland is applying to join the EU – it is smaller than the limit noted
But I can’t resist noting:
” If you are suggesting that we are simply absorbed into the UK as a county then that will never, ever happen. The Channel Islands would do a UDI before that ever happened. Far more practical, for everyone’s sake, for Protocol 3 to the Treaty of Rome to be renegotiated to reach an appropriate resolution, with the Channel Islands retaining their independence but coming more closely aligned to the EU. That can only mean access to some benefits, but not all, and a commitment to some obligations, but not all. Give it 20 years and it may well happen. Before then, I doubt it.”
Ah, so UDI when bankrupt because of failed government policies, record deficits and a failing single economic activity. What sort of fantasy is that?
It really is time you guys smelled the coffee
I’d get that French application in soon if I was you
You might need somewhere to go
Richard
Richard
In what way it is “absurd” ?
I don’t think that I’m wrong on passports but, if I am, please tell me why. I’ll be happy to be proved wrong.
I don’t recall stating an actual population limit for EU membership, just that Jersey’s and Guernsey’s were too small. Iceland has a population of 317,000…not far behind Malta’s, but 5 times higher than Guernsey’s and more than 3 times higher than Jersey’s. There is no guarantee at all that Iceland will be accepted as an EU member, especially as its now bound to be a net recipient of EU funding for many years ahead. Merely applying to the EU is no guarantee of being accepted, as Turkey are finding out.
And how can you say that we are bankrupt (unlike the UK !) when we have hundreds of millions of pounds of reserves and no debt ? And scope to increase GST to cover a short-term structural deficit ? And a single economic activity which is suffering from a global recession ? None of us can possibly know yet whether the recent decline is due to the recession or to other factors.