The Daily Mail on tax havens

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The Daily Mail is the best read newspaper in the UK. They published this article yesterday. Their research was to call me whilst I was on a train.....

A 30 second guide to...Tax havens

4 August 2007

The Daily Mail City Team explains all about the intricacies behind Tax Havens.

What are they?

Places where private equity funds, hedge funds and wealthy individuals base themselves in order to minimise their tax bills. There are 72 in the world. British firms or individuals moving wealth offshore to escape the taxman favour the Isle of Man, Jersey and Guernsey. Hedge funds prefer the Cayman Islands.

Any recent examples?

Delta Two, the fund bidding for Sainsbury's, is headquartered in the Isle of Man. If Delta buys Sainsbury's then sells it at a profit, it probably won't pay tax.

The government is examining whether partners of private equity firms are using the UK's liberal non-domicile rules to set up personal companies in havens, avoiding tax on gains made from owning stakes in their firms.

Why the controversy?

The Tax Justice Network estimates governments around the world lose over £125bn a year because of tax havens. Private equity firms and hedge funds gain a shroud of secrecy from moving to havens, as zero tax regimes often do not require any corporate disclosure.

Should they be outlawed?

Tax havens argue their economies would collapse without the huge inflows of cash. Most have thriving professional and service sectors catering to these wealthy folk