I frequently find tax haven behaviour bizarre at best. The mindset that can believe that offshore is a reality is one I admit I do have difficulty understanding.
As example of its weird thinking there was an editorial in the Jersey Evening post yesterday that sung the praises of the States of Jersey and the political hierarchy for their success in securing victory for zero / ten taxation.
It takes extraordinary logic to think that Jersey won on this issue. From 2004 to 2011 Jersey persisted in arguing that its deemed distribution rules - an integral part of zero / ten, designed to ensure that the tax haven ring fence denying tax haven priveliges to its domestic popuation, were legitimate. It wriggled, argued, spent a great deal of money, consulted widely, and stuck to its guns up to presentations made at the EU last autumn.
And the EU said it was wrong. However Jersey turned it was wrong they said; the rules were abusive.
Now Jersey has given in and is abandoning those rules, accepting an assurance from its Treasury Minister that it will only cost £10 million or so a year (even though very recently a States member was assured by the same Treasury Minister that they actually had no idea of an accurate estimate of the sum involved) and has declared that a victory.
Well, all right then. If being proven wrong with a resulting considerable loss in tax, which all admit will impact significantly on the ordinary people of Jersey is a victory then I concede it is - but only because the criteria used to say so is that this is a victory for the finance industry in Jersey. And that's very, very different from being a victory for Jersey itself.
I also suspect the story has yet to reach a conclusion. I await the anti-avoidance rules that will, no doubt be coming soon to limit the loss to Jersey from this retreat. What chance is there that the ring fence will reappear then? After all, Jersey got the victory it declared yesterday in June 2003, but then introduced the deemed distribution rules when it realised it could not afford zero / ten. Will we now see this happen all over again?
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Not putting them out of business straight away certainly ISN’T a victory for some people though, is it?
The Crown Dependencies (is the Crown “dependent” on the islands or the islands “dependent” on the Crown?) have developed the talent for:-
1) Claiming one thing and acting another
2) Initiating new schemes whilst quietly discarding others
3) Drawing a veil of opacity over 1) and 2)
A convenient addition to this confusion is the tax AVOIDANCE/EVASION debate which provides vested interest philosophers a platform to pontificate on the structure of theory, the relativity of morality and the cognitive facets of logic, blah, blah . …
Why not make Jersey, Guernsey and the Isle of Man part of the UK (and hence the EU)?
Then we can all get on with our lives in the knowledge that at long last these islands are under the control of what passes for competent regulation in the UK.
Has an announcement on the decision been made from the meeting today in the EU?
@Arnald
I’m out and about
Not that I have seen….
@Premier Shareholder Group
Glad you said “what passes for competent regulation in the UK” and didn’t claim that there actually is competent regulation in the UK. And don’t kid yourself. Everything of any substance done in the islands is done in total cooperation and connivance with the UK at a high level. Your bile against the Islands should be directed closer to home.
@Woolley
“Everything of any substance done in the islands is done in total cooperation and connivance with the UK at a high level.”
“Total cooperation” is not entirely true.
For instance the Isle of Man government recently stated (in writing copies available) that it is not beholden to adjudications/rulings passed by the UK Financial Services Authority.
This when it suited the government to be non “co-operative” with the UK — in contrast to its “co-operative” disposition when the government supports adjudications made in UK High Courts.
This suggests that “co-operation” is discretionary, only to be employed as necessary.
The regulation of the UK financial services industry is, faults admitted, of “substance”, whilst regulation on the islands appears to lack coherent “substance” other than it almost entirely favours the finance industry.
The PSG agrees with the essence of your comment which suggests that the UK needs the crown dependencies as much as the crown dependencies need the UK.
The question is why?
“Why not make Jersey, Guernsey and the Isle of Man part of the UK”
Given that technically these are separate countries with their own parliaments how do you suggest doing this – invading countries has gone out of fashion (except if you are America)
@Justin150
They are not countries
They are Dependencies
And this won’t happen a) without consent or b) until they’re bust