Jersey: hypocrites to their core

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I was idly reading, as one does on a Friday afternoon, Jersey’s guide to its zero-ten tax system and noted paragraph 12 which says:

It is critical for the administration of the deemed dividends, loans and full attribution provisions that it can be determined explicitly who is the owner of the shares in a company. Article 82A has been inserted to make this explicit. An individual is deemed to own shares in a Jersey company if he has any interest in them, whether equitable, legal or contractual, other than an interest as a bare nominee or bare trustee. Such ownership will be deemed to exist even if the individual owns the shares even if the interest is through one, or a series of, bodies corporates or trusts. These provisions are also crucially important for the information an individual is required to declare on his personal Income Tax Return.

Specifically, an individual will be deemed to own shares if –

• he has any right to acquire or dispose of the shares

• he has any right to vote in respect of the shares

• he has any right to acquire, to receive, or participate in distributions of the company, or,

‚Ä¢ he has to give his consent for the exercise of any right of any other person interested in the shares, or if other persons interested in the shares can be required, or are accustomed to exercise their rights in accordance with the individual’s instructions

These provisions will ensure that the Jersey tax base is protected and that Jersey residents with interests in Jersey resident companies are assessable on the proper amounts applicable to them, whether their interests are held directly or indirectly.

It is important to note that these provisions apply, and consequently the deemed dividend provisions, to all unlisted and listed companies, where the Jersey resident individual has an interest of more than 2% in such a company, whether directly or indirectly.

This is staggering. Jersey admits that without knowing the beneficial ownership of shares in companies in the island it cannot properly operate its own tax system and yet it refuses, point blank to require this information be put on public records so that other tax administrations can have the same advantage with regard to the companies registered on the island.

This is hypocrisy of the highest order.

But that’s typical of Jersey.

Now do you see why I say Jersey is a secrecy jurisdiction: a place that intentionally creates regulation for the primary benefit and use of those not resident  there. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use  Jersey has created 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.

Call it the facilitation of tax evasion if you like, because Jersey knows it cannot stop evasion within the island without this data so it must know that by denying it to others evasion must  follow. If that’s not deliberate nothing on earth is.