As the FT notes:
UBS, the world’s second biggest wealth manager by assets, said that recent tax changes affecting Swiss bank secrecy would enable foreign clients to withdraw about SFr15bn-SFr40bn ($15bn-$40bn) of the funds deposited.
What they mean is, they know they are holding that balance (at least) of illicit funds for depositors from the US, Germany and UK.
No wonder we’ve always suspected our estimate of $11.5 trillion of offshore funds is understated.
And as for those who say, as so many Swiss banks did, that there is no evidence of illicit fund holding offshore, I will quite candidly say that they know they are not telling the truth because the evidence to the contrary is unambiguous.
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Well to be correct, that’s not $40bn of tax abuse, that is $15-40bn of capital. The tax is a much lower figure, say an average of 40% of 5% of $15-40 bn, or $300-800m a year.
UBS manages about $800 billion, excluding its US domestic business.
So only between 2% ($15 billion) and 5% ($40 billion) of the total may be illicit (i.e. undeclared).
It is not a trivial amount, but if anything it demonstrates that the estimates of untaxed deposits in Swiss banks are widely and grossly exaggerated.
@Alex and
@Million Dollar Babe
You two certainly delight in getting just about everything wrong.
first, the capital in many of these accounts may well be evaded. Secondly, interest is due on tax paid late. Thirdly penalties are due as well. Add this together and the entire balance is probably due to tax authorities. In addition, this is the tax due to just three countries. There are vastly more. You may have noticed. But in your cases I could not be sure
@Million Dollar Babe
Babe. You really know how to twist figures.
The CHF 40 billion is an estimate of how much could be withdrawn by German / UK residents. How on earth do you deduce that the CHF 40 billion is the total undeclared assets? Your support of tax evasion is now clouding your judgment.
By the way, the CHF 40 billion being withdrawn from UBS Switzerland will 100% go to UBS Singapore.
@Mark
The estimate is of UP TO $40 billion, and it is for all withdrawals resulting from the recent changes to the banking secrecy laws, including BUT NOT LIMITED TO the new treaties with the UK and Germany.
And in fact the $15 – $40 billion may very well include significant deposits that are perfectly legitimate from a tax perspective (for instance from UK non-domiciled residents) but whose owners are concerned (quite justifiably) by the erosion of their fundamental and constitutional right to privacy.
In fact, as I pointed out to Richard in a post that he gracefully deleted, neither you nor I have the beginning of a clue of the origin and status of these funds. But I think I am in the correct direction of travel when I suggest that if there were significant untaxed deposits in Switzerland/UBS, the outflows would be far more significant.
(btw, your idea that the deposits are being diverted from UBS Switzerland to UBS Singapore does not make sense in light of the article, which clearly states that these deposits are leaving UBS on a global basis)
Best.
@Million Dollar Babe
I deleted the post because you are tedious, and so often wrong that I exercised my right to editorial freedom and consigned you to the bin, where most of your comments do rightfully belong