I have commented often on the UK - Swiss tax deal that Dave Hartnett negotiated and which was initialled by both parties in October. My objections to the deal are numerous, some being summarised here and others here.
Now Bloomberg has noted:
Switzerland is discussing “technical adjustments” to tax agreements with the U.K. and Germany, SonntagsZeitung reported, citing Andre Simonazzi, a spokesman for the Swiss Federal Council.
The changes aim to counter criticisms of the accords from the European Union, the Zurich-based newspaper reported. The talks are on revisions to distinguish between the EU-Swiss tax on interest and a separate withholding tax, Simonazzi was cited as saying.
Similar stories have appeared in the Swiss press.
I think three observations follow. The first s that those who said the opinion of the EU on this issue did not matter are clearly wrong: it does, very much.
Second, this renegotiation seems to confirm that others will not go down this route and the hopes of Luxembourg that they might use the deal as a mechanisms to shatter the upgrade to the European Union Savings Tax Directive - a hope, I suspect shared by George Osborne in support of UK tax havens - look like they may be shattered.
Last, yet again we see the gross incompetence of Dave Hartnett at work - seemingly doing deals irrespective of their legality to keep his political masters happy, whatever the cost. I just wish I had the confidence he was being replaced by someone better.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
Has the government announced Hartnett’s replacement? You wonder what the top lawyers in HMRC actually do. But no surprises seeing as the General Counsel and Solicitor Mr Inglese told a shocked Public Accounts Committee that neither he nor any of the three directors he hired for the Solicitor’s Office is “what you’d call a tax lawyer”!
Still no word from the Labour Party. Since it’s the prerogative of Parliament to impose tax you’d have thought that this deal would have been debated in Parliament. But Hartnett seems to have appropriated the power of Parliament to impose and forgive tax predictably to favour big business and the super rich and nobody – apart the HMRC whistleblower Mr Mba – seemed prepared to do anything about it. The Swiss deal should be debated in Parliament.
from the Independent
Brian Basham: Beware corporate psychopaths — they are still occupying positions of power.
In a paper recently published in the Journal of Business Ethics entitled “The Corporate Psychopaths: Theory of the Global Financial Crisis”, Clive R Boddy identifies these people as psychopaths.
http://www.independent.co.uk/news/business/comment/brian-basham-beware-corporate-psychopaths–they-are-still-occupying-positions-of-power-6282502.html
Mark
A Jersey law trust with proper trustees in Singapore, as opposed to your “rubber stampers”, would not be caught.
It would be
You are wrong
Tell me. Why use a Jersey law trust with Singapore trustees. Talk about the epitome of tax abuse. LoL. Why not use a Singapore law trust. Oh.. for admin purposes. LoL.
Richard
I am not wrong. You are. If the trust is genuinely controlled from Singapore then is outside the scope. If I am wrong, please tell me how.
Mark
Very simple. There are tens of thousands of existing Jersey law trusts out there. Jersey has a long-established trust law and masses of trust case law. Singapore’s own trust law is nowhere near as modern and there is a lot less case law. It’s no different from the tens of thousands of offshore trusts which have England & Wales as their governing law but that does not make them UK-resident trusts.
A Jersey law trust with Singapore trustees doing their job properly, and with underlying discretionary investment and banking in Singapore or Hong Kong, is not caught, even if it’s bookkeeping, accountancy and preparation of trustee minutes were carried out from Jersey. The differentiation between “management and control” and “basic administration without control” is crystal clear and very well established in all major onshore and offshore jurisdictions. There is not a chance of any other outcome.
Trusts of the type referred to are not controlled by trustees
Shall we stop the pretence?
Why are there letters of wishes and enforcers if that is the case
All hidden from view, of course?
Stop excusing tax evasion
Richard
You carry on thinking that way if you like, but if you don’t accept reality then your approach is flawed.
You appear to be saying that there is no such thing as an offshore trust genuinely run by a proper trustee and which doesnt involve tax evasion…you have no idea how wrong you are.
I have been administering offshore trusts for more than 30 years and I have seen an enforcer in less than a handful of cases.
But don’t let reality get in the way of your propaganda.
You are right that sham trusts will be caught, but you are 100% wrong by saying that properly run trusts will also be caught. But as you claim there is no such thing as the latter, those of us offshore who do run trusts properly have absolutely nothing to fear.
Oh come on
Sham trusts are legal in Jersey, Cayman, BVI et al
And they’re legal because the reality was that almost all trusts were of this type
You also forget I was a practitioner once – and still see trust arrangements sent to me now
Respectfully, I simply do not believe you – and nor does anyone else with any sense
And not a single sane person on earth would trust an offshore trustee with their cash without having recourse to its management – let’s be candid – why should they? They’d be certifiably mad to do so
Oh dear Rufus. You’re really in the doo-doo.
What you’re completely and blissfully unaware of, is a new EU directive in the pipeline which is going to rule that interest, not sourced in Singapore but paid by a EUSD territory head office owned branch (Permanent Establishment) in Singapore (or elsewhere) is deemed to be sourced by the head office. Think fixed income funds from Luxembourg, structured notes from Switzerland, EU bonds, fiduciary deposits in Jersey, Irish insurance wrappers, etc. I can go over the relevant OECD articles and DTA conditions this is based on. Therefore the head office bank will apply the EUSD provisions by look-through on the beneficiary according to the EU anti-money laundering directive (which is also due for a imminent change).
Now here is where you’re ilk gets stuck in the bog. I can tell you in the 2nd review of the EUSD directive, the h.o. bank will be obliged to consider the initial contributor (eg principal settlor) of assets as the beneficial owner if an immediate beneficiary is not identifiable (as you know with discretionary trusts, foundations, etc), i.e. Article 4(2)(b) will be replicated in Article 2(3) for Paying Agent (i.e. Head office bank as economic operator will apply same conditions as Paying Agent Upon Receipt when trying to deem a beneficial owner). This may not even have to wait for the 2nd review of the EUSD directive because the EU money laundering directive deems the alternate beneficial owner of a trust as the individual who controls the management, which as you and I know is the settlor due to undisclosed letter of wishes, appointment of protector, etc.
The problem is, and it shows, you’re stuck in the 30 year past of sham crude tax planning. it’s a different ball game now, with sophisticated wolves on your tail…
Its time to start using 21st century ultra sophisticated tax planning methods which is light years ahead of your current thinking. (And don’tthink multi -ayer IBC / trust, circular holdings gonna help an iota).
What I suggest for your crowd is to move your clients bank accounts to the Royal Kingdom of Cambodia Peoples Bank branch in Singapore. LoL. You’re going to find it harder and harder to evade tax.
Richard
Clearly your definition of a “sham trust” is different from those of the courts. A settlor reserving certain powers unequivocally does not cause it to be a “sham”. It merely means that the tax treatment may be different.
If you think that “almost all trusts” are set up like that then you are simply wrong.
And since when did being an onshore accountant who, by your own admission, did not engage in offshore planning, give you any practical knowledge of administering offshore trusts? You have no first hand knowledge whatsoever yet you claim to be an expert.
As for your last two paragraphs, yet again you show your ignorance. You really seem to have no understanding of how the trust world operates. Let me throw this one at you – of all the offshore trusts which have come under the microscope of revenue authorities, how many have been set aside as shams? If your argument was correct then the revenue would have every offshore trust aside and disregarded. They haven’t. With good reason too.
A trust with reserved powers of the type permitted in Jersey is a mere nominee arrangement. If claimed otherwise it would be fraud, but Jersey knew when passing this law that was what would happen, and was happening. I published the internal correspondence proving that.
And yes I do know rather a lot about offshore trusts. I may not have created them but I sure as heck helped people deal with their ramifications. that taught me much more about the realities.
As for your last comment – since most trusts are unknown your claim is farcical
Richard
You say that a reserved powers trust is nothing other than a nominee arrangement. That’s a bold statement indeed and you won’t find any trust lawyer agreeing with you (and I don’t just mean a Jersey trust lawyer).
If a Jersey irrevocable trust has a reserved power which requires the settlor’s consent to be obtained prior to any sale of specific shares, ie the settlor’s family company which he gifted to the trust to ensure that his children don’t fight over it’s future after he has died, and for that settlor’s consent requirement to pass to, say, the family’s trusted lawyer after the settlor’s death, how is that a sham?
The family company’s shares and all economic interest therein are subject to the provisions of the trust. The settlor cannot simply cancel the trust. He has merely retained a veto over when or whether those shares are sold, but that’s all. He longer owns the shares, no longer has any legal or beneficial ownership in them, and cannot dispose if them or receive the proceeds. That is unquestionably a valid trust, not a sham, and the trustee has fiduciary responsibility for those shares in accordance with the trust instrument, and for dealing with all dividends therefrom.
There is no way that this could be construed as either a sham or a nominee
arrangement, yet it is an extremely common use of reserved power trusts.
Look at STAR trusts.
And VISTA Trusts
And Jersey’s 2006 trust law.
All deliberately create sham trusts.
Richard
Please specify why you think any of those laws create “sham” trusts. I think you will find that the legal systems and centuries of precedent will reach a different conclusion to your own.
Is there an instrument or agreement to convey property to a trust? Yes.
Are there clearly identifiable trustees and beneficiaries under the relevant instrument or agreement? Yes.
Is the trustee accountable to act in a fiduciary manner re the trust property to the beneficiaries in accordance with the trust instrument or agreement? Yes.
Is the trustee able to treat the trust assets as still belonging outright to the settlor? No.
These are not “sham” trusts per se.
I can accept that they COULD be used to set up a sham arrangement with the collaboration of all parties if all parties were prepared to commit a fraud together, but that is no different from any legal document or agreement of any type.
You might want to read http://www.trustees.org.uk/review-index/Sham-trusts-Sham-trusts.php
and http://www.taxresearch.org.uk/Blog/2006/06/15/jersey-passes-law-allowing-%E2%80%98sham%E2%80%99-trusts-for-use-by-tax-evaders/
and even http://www.taxresearch.org.uk/Blog/2006/09/18/jersey-what-was-really-said/
Richard
I have read all of those articles.
Interestingly, Philip Laidlow’s article predates the Jersey trust law to which you refer by 6 years. Was it still relevant in 2006 and to what extent was it relevant to the Crown Dependencies? I can assure you that seen trust arrangements run out of Panama and Cyprus in particular which have left me perplexed, but primarily because the lawyers running them clearly had no knowledge or training in trust law.
Re your first Tax Research article, I’m afraid that your 8th and 9th paragraphs highlight your failure to grasp the situation. If the trust is not revocable then the settlor cannot simply take back the trust assets and pretend that the trust didn’t exist – that is a clear breach of trust. There is no reason why a settlor cannot also be a member of the class of beneficiaries. In no way would that constitute a sham trust.
The third article, being a copy of the email trail, correctly highlights the potential for tax avoidance, depending on the tax residency status of the settlor of course, but that’s an entirely separate issue from that of a sham trust. The tax considerations of using a trust are ALWAYS relevant.
But the trusts are deliberately set upo to revocable
That’s a sham
Richard
Are you seriously trying to claim that a trust is a sham if it’s revocable? Are you denying that a valid trust exists between the date of establishment of the revocable trust and the date of revocation, and in the process claiming that the trustee has no fiduciary responsibility during that period? If so then I can recommend some basic courses on trusts which you may find helpful.
I’m saying they’re a sham for tax – sure I am
And that’s what Jersey knows and acknowledged when it made such trusts legal
Such trusts are nominee arrangements – something very different indeed
And I think I’ll call that a fact – except in Jersey et al where black is white, of course
Richard
The specific anti-avoidance legislation of many countries agrees with that. Revocable trusts are usually disregarded for tax purposes. That’s really not surprising as the settlor has expressly not irrevocably parted with ownership of his assets.
However, in other countries, and I’m referring here to those countries which Jersey was targeting with it’s reserved powers legislation, such as the GCC countries, Hong Kong, Singapore and several Latin American countries, no such anti-avoidance exists. Indeed, in most of those countries no potential tax liability even exists, so nothing from a tax perspective is being evaded or even avoided. How does one evade or avoid something which doesn’t even exist?
And I think you will find that in my example I expressly referred to IRREVOCABLE trusts. I have only ever set up one revocable trust in my entire career as I gave never found them useful,
Rufus
Funny how you get upset when Richard calls Jersey trusts sham and cowboys. But I believe you are the epitome of a sham / cowboy.
So now let’s see.. UK resident settlor comes to your doorstep to establish a discretionary trust. You help set it up, do the paper work and appoint cohorts from your firm’s branch in Singapore as the trustees. Now we know administration cannot be done in Singapore and your buds admire you so much that they choose you of all firms in the world to administrate the very trust you set up.
Now do you REALLY REALLY believe you can escape the Paying Agent Upon Receipt responsibilities or do you believe your sham set up will legally avoid its tax responsibilities?
Wow, you seem so morally bankrupt, you can’t even see where you’re twisted thinking has gone off the tracks. Now let’s here how you just the bookkeepers and no more.
Mark
Once again based on your first paragraph I have to ask why the comments policy of this blog do not seem to apply to you. How on earth can you make such an allegation?
If a UK resident settlor approaches me re a trust, I first establish his UK domicile status for IHT purposes to check whether a gift to a trust would be a chargeable event.
What are you talking about when you say “Now we know administration cannot be done in Singapore”? It can be and it is. My firm has a trust licence there. Why do you not check your facts before spouting off?
I reiterate that the trusts I set up are not “sham trusts” and can be fully managed from Singapore without any EUSD obstacles. At no time have I said or claimed that there is any intention to avoid any tax responsibilities. If any distributions or other taxable benefits were conferred on any trust beneficiaries then that is fully declared – we do not deal with tax evasion. Using Singapore simply avoids the unnecessary EUSD burden – it does not reduce the other tax reporting obligations.
You are clutching at straws when it comes to properly-run, tax compliant structures. If you can’t or won’t accept that such structures and businesses exist, then you have an inaccurate handle of what you are trying to attack.
We don’t know who your firm is
You haven’t told us
You just assert
And that’s why we don’t believe you
I don’t need to tell you who my firm is.
So you are allowed to assert and allege without foundation or evidence, but I am not allowed to counter those assertions and allegations and if I do then my comments are to be disregarded because I don’t produce evidence?
What sort of a debate is that then?
A fair one
With all the facts on our side
Rufus
I agree whole heartedly that revocable trusts are a sham. But you’re too deep into the scam for your own living to acknowledge that.
Mark
How can you possibly make such a ridiculous statement? You know absolutely nothing about me! I thought gratuitous insults were contrary to the Comments policy of this blog.
For the record:
1. I have never engaged in tax evasion.
2. I only deal with cluents who use fully legitimate tax and estate planning structures, backed up with extensive advice.
3. I oversee the tax compliance ongoing obligations re all aspects of structures with which I am involved.
4. Most of my clients are long standing wealthy families from areas of the world with minimal tax planning obstacles, such as Saudi, Kuwait, the UAE, Hong Kong, Singapore and Malaysia.
5. I am Jersey born, and that’s one of the reasons why I set up my business in Jersey. But I have lived and worked all over the world and don’t have to live in Jersey at all. I employ dozens of people there and would like to continue to do so.
6. I passionately believe in the right to privacy whilst being fully tax compliant.
7. I utterly dislike the manner in which several bank trust companies and small private trust companies in Jersey refuse to move with the times and embrace then new tax compliance regime. They are very much a minority, but sadly they do still exist.
8. I will defend my island against the misinformation put out about it in the media by Richard, yourself and others. I will not defend the indefensible though.
I hope that gives you some better perspective and stops your unnecessary and childish barbs which are totally unwarranted.
Mark
Re your first paragraph, I doubt very much whether such a law will see the light of day before the EU disappears altogether, and/or until the UK withdraws altogether.
Secondly, there are some excellent and very strong banks headquartered outside of the EU who will do very nicely. Think Royal Bank of Canada, Bank of Singapore, Standard Chartered, HSBC (soon), and several robust US, Australian and South African banks. Who needs the EU-headquartered institutions?
Re your third paragraph, you have been taken in by Richard’s false propaganda re offshore trusts. Properly run ones run by proper offshore trustees will be absolutely fine as they don’t allow the settlor to control the trust. If you and your contacts at the EU think that you have hit a home run based on your completely wrong assumption, then you will be extremely disappointed with the outcome.
Re your fourth paragraph, don’t worry – I was one of the first to ditch old style “tax planning”. How you can possibly have reached a different conclusion about how I operate is quite remarkable.
My clients will be perfectly all right thank you, with properly run, fully tax compliant structures managed and controlled out of strong, politically sound and well-regulated finance centres who are not influenced by the EU. Modern technology and communications are a wonderful thing, and the back office administration of those trusts will still be carried by teams of very competent trust administrators in Jersey.
I suggest you go back to your drawing board and try to resolve your challenges. Maybe you need to work out how to take over Hong Kong or Singapore and close them down. Then Dubai, then the Bahamas. Oh, and the US and New Zealand. Good luck.
I have long contended that anyone who believes in offshore has lost all touch with reality as it is nothing but a sham – as of course, be definition, is true as offshore simply means recording transactions that actually occur elsewhere. You are clearly a believer. It follows that you are therefore out of touch with reality. It’s going to bite you especially hard in that case since all your claims are entirely without substance – as you will have to find out.
Oh dear Rufus…
All this trust sham set up and making the poor settlor pay through the nose. Now for your Achilles heel. Eventually the settlor wants to get his sticky mitts on his ill gotten lolly. The EU working on making all EU banks report inflows from tax havens (ala Singapore) of more than €15,000 without commercial justification. Sure, you can arrange a corporate credit card.. but that’s small potatoes. Face it chap your days are numbered. As for the EU collapsing or UK pulling out, I suggest you’ve been visiting too many Dutch coffeeshops.
Mark
Clearly the gratuitous comments policy for some reason doesn’t apply to you.
Why is the “poor settlor paying through the nose”? He is happy to pay for a trust which achieves his tax and estate planning objectives.
Why do use terms such as “getting his sticky mitts on his Ill-gotten lolly”? My clients don’t fit that category at all. Try applying that term to wealthy NRI, Middle Eastern and Far Eastern families who have built substantial family business wealth, who are not even resident in countries which tax distributions from trusts, or, if they did, would not be in slightest but concerned about the tax consequences of distributions needing to be reported? Those sorts of families are who I look after in Jersey. All your baseless assumptions and allegations are simply irrelevant to my business or my clients.
You and Richard seem to have this deep fixation that all trusts are shams and all offshore trustees are facilitating tax evasion. That’s so inaccurate that it’s laughable. Granted that any cowboy trustees out there have a few big problems ahead, but nothing you have said gives me any cause for concern, other than the need to move management and control of my clients’ affairs to well away from this part of the world so that they are not inadvertently caught. I don’t have a single Continental European client and my UK clients are totally tax compliant. Why should I be concerned?
Maybe I am in a minority, although I’m sure I am not. Trustees operating properly have nothing to fear.
You ignore the definition of secrecy jurisdictions:
” Secrecy jurisdictions 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.”
You really don’t get it that your whole purpose is to undermine regulation, the rule of law and when applicable democracy, do you?
All you do is evasion, whether tax or otherwise, and all as offensive
Rufus,
There are discussions regarding the feasibility to make “any manager” of an entity or legal arrangement within jurisdiction the Paying Agent Upon Receipt if the rest of management are based outside the territory. Understand the philosophy of a Paying Agent Upon Receipt. The tax authorities are looking for a mark to pin the responsibilities for applying the EU savings tax obligations… and a perfect target would be one of the trustees resident within the territory… Bare in mind, the ultimate goal is automatic exchange of info.. so you dear Rufus (a.k.a.Darren) are the perfect patsy to provide that info, especially as you’re the admin specialist. Ta very much..
But keep it in perspective Rufus.. the main goal is Liechtenstein foundation who may have a majority council in Singapore but by law must have one resident member in Liechtenstein.. so that’s the legal basis of going after the one. Such a pity it catches sham arrangements like you describe in Jersey at the same time 🙂
By the way, Rufus. If you continuously claim all your clients are non EU residents (much like all Jersey trustees claim) then why even bother commenting on the EUSD??
Richard
I ignore your definition of “secrecy jurisdiction” as it’s yours alone. It has no legal standing in any country as far as I am aware.
And if no tax is being evaded, what exactly is being evaded? Individuals (in most jurisdictions) are entirely free to make lifetime dispositions of their personal wealth. Forced heirship laws only bite on a testamentary basis in civil law jurisdictions, but not on lifetime gifts.
The objective in the example to which I refer is to keep a family business intact, rather than expose the family business to the well-known “rags to riches to rags in three generations” syndrome. These family businesses typically employ hundreds and even thousands of non-family employees whose jobs are at risk if the family business imploded. Where is your problem with that? Many of these countries (in the Middle East and Far East) don’t even have estate taxes to avoid, let alone evade.
Are you now trying to say that keeping the family business intact is immoral and unacceptable? Surely not.
Sell the business then
You’re not saying you guys in Jersey are so clever you can run them as well?
Mark
Wrong again on multiple counts.
Firstly, I have no idea who Darren is!
Secondly, there is absolutely no requirement for a trust with Jersey governing law to have a Jersey-resident trustee. That is indeed the case for a Liechtenstein foundation but I couldn’t care less about those as I don’t use them and neither do my clients.
Thirdly, you need to check your definitions. “Management” is about who makes the decisions, “Administration” is about who the managers delegate the paperwork to in order to imolent those decisions, such as bookkeepers and company secretarial staff who play no part in the making of the decision.
Why do I comment on the EUSD? Because people like you wrongly claim that it will catch all of us in Jersey. For the reasons I state, it most certainly will not catch many at all, other than the remaining handful of cowboys.
So you admit there are cowboys?
Odd – Jersey says there are none
And we say there are more
In the dark who can tell?
Except that the evidence is that those paying fr the dark do so for a reason – and it’s fair to presume that it’s not to pay tax
Richard
Yes there are still some cowboys. Not many mind, and the remaining few are being methodically weeded out.
I have no doubt that those cowboys will still have tax-evading clients. The vast majority of us who do things properly would rather see them out of business asap instead of undermining all that we do.
That’s what’s always been said
Change the record
Rufus,
I’ve already discussed in detail the exact same case you describe about a Jersey trust which is administered in Jersey but claims to be managed from Singapore (especially by same firm of trustees). You can bring all the lawyers you want but the Jersey trust will be deemed the Paying Agent Upon Receipt. If Jersey agrees with you, then I can tell you the EU Commission will refer Jersey via the the UK to the ECJ. It’s an obvious sham you trying by having a Jersey trust with Singapore trustees BUT administered in Jersey.
The one question will be “WHY?”. Why have a Jersey trust set up by a trust company but managed by the same firm from Singapore yet administered back in Jersey? Tax evasion is the only answer my friend. If you can’t see through this simple inane sham, then 30 years of rose tinted glasses have you seeing a permanent pink tinge.
Beside the obvious “tax abuse” (exact words used, my friend) a Jersey trustee is an individual or company who receives assets from the settlor and who has the responsibility of ADMINISTERING them for the benefit of the beneficiaries. Sure, there may be Singapore trustees as well but you, the administrator of a Jersey trust will be deemed a manager and as such a Paying Agent Upon Receipt. Even if a bank was made the adminstrator, then the bank would be Paying Agent Upon Receipt if all other trustees were resident outside the territory..
A trust administrator may not play a passive role with respect to other trust administrators, merely “rubber stamping” their decisions—he must actively participate in decision-making and exercise independence of judgment, even if it means opposing other trust administrators. If he uncovers self-dealing or other corruption on behalf of another trust administrator, he must act vigorously to protect the trust assets, even if it means subjecting the other trust administrator to prosecution.
Rufus… but you have no worries as all your settlors or non EU residents. LoL.
Rufus
You can talk about Singapore trustees (part of your firm? LoL) subcontracting the trust administration back to you (who initially helped set up the trust?) until the cows come home. A Jersey trust administered in Jersey will be deemed a PAUR. Take that to the bank and smoke it.
A trust administrator, also called a trustee, is responsible for managing assets placed in a trust, an arrangement intended to protect a person’s property until he is able to take care of it himself. The obligations of the administrator include maintaining accurate records, seeking professional advice when necessary, paying taxes, and making reports to beneficiaries of the trust. Duties also include protecting trust assets, accounting for those assets and making proper distributions to beneficiaries of the trust. Following the instructions of the trust document or trust instrument is extremely important for a trust administrator.
Let’s see you get someone from Jersey Finance to agree in writing to your crooked sham set up to avoid the EUSD. Never my fried, never will happen. The Jersey Trust will be the PAUR as per Annex I part 2 which will be moved to Annex II when Jersey signs up.
http://www.the-best-of-both-worlds.com/annex.html
Entities and legal arrangements whose place of establishment or place of effective management is in a country or jurisdiction listed in Article 17(2), to which Article 2(3) applies pending the adoption by the country or jurisdiction concerned of provisions equivalent to those of Article 4(2):
Jersey Trust, governed by local or foreign law
Mark
You are still wrong. You would only be correct if the trust was actually being managed from Jersey, which under no circumstances would it be. And of course it wouldn’t be a “branch” of the Jersey business in Singapore providing the trustees. It would be a sister company owned by a non-Jersey parent. You keep paddling your canoe the wrong way up the river.
There is NO tax evasion! All tax reporting obligations are met in full. What is avoided is unnecessary EUSD tax leakage on an arising basis. You have this fixation with tax evasion. If it’s not taking place then you won’t find it. I dont recognise the term “tax abuse”. Evasion is illegal and planning is legal. Period.
You are wrong if you are not distinguishing between the management and administration of a trust. The administrator has no capacity whatsoever to make any decision on behalf of a trust. It is therefore outside all definitions. Your fourth paragraph highlights the fact that you have failed to grasp the fundamental difference between a trustee outside of Jersey will all decision-making powers and a Jersey-based administrator who is only able to do what the Singapore trustee delegates to him in the form of bookkeeping and record keeping.
And yes, your last paragraph is correct.
Ah “unnecessary EUSD tax leakage”
So you’re in the business of evading obligations then?
And odd how you’re in Jersey supplying services but all the decisions are in Singapore….yes, I believe that
No one does
That’s why the EUSD looks through all this – and beats it
Mark
I’m still laughing at your 5.15pm post. You still don’t get it!
Your second paragraph sums up your inaccuracy. Anybody can carry out back office administration of a trust without even being regulated as a fiduciary, provided that they do not handle any assets on a fiduciary basis. By contrast, the trustee must be regulated to carry out fiduciary activity. They are usually one and the same outfit but they don’t have to be. A trustee and a trust administrator carry out separate functions.
Even the definitions under the Swedish proposals don’t catch the trusts under my example. If a client of mine forms a trust in Singapore today with Singapore trustees and elects to have the trust governed by Jersey proper law, then the trust is not established in Jersey (it is established in Singapore) and is unquestionably managed and controlled in Singapore, not Jersey. And if the choice of Jersey governing law proves to be a problem in the future, then the choice of Bahamas, Singapore, Hong Kong or Mauritius governing law, or even Delaware for that matter, would address that issue. But regardless of the choice of governing law, if the Singapore trustee wishes to appoint an administrator in Jersey to handle the bookkeeping and back office administration on a contracted outsourced basis, then the EUSD would still not apply unless the settlor and beneficiaries were EU residents.
I hope nobody at the EU is paying you for advising them.
Rufus..
I really really don’t understand the purpose of your whole argument.. you blah blah on about Jersey trusts won’t be in scope if trustee in Singapore etc., then you qualify your entire diatribe by summarising with… then the EUSD would still not apply unless the settlor and beneficiaries were EU residents !!
Good gawd man. If the settlor and ultimate beneficiaries and not EU residents then why bother with Singapore. Why go to all the effort to show the Jersey trust is not manged in Jersey if the Beneficial Owner is non EU resident? Even if the trust was established, managed and administered in the City of London, with all assets in Barclays UK, the trust would be out of scope.
Me thinks you’re a ex dairy farmer who churns for fees.
Richard
No I’m not evading obligations -I’m stating that in the circumstances given no such obligations as claimed by Mark exist.
Mark has previously alleged on a previous thread that the proposed extension of the EUSD will catch all trusts in Jersey. I have demonstrated that it will not, although there is no chance of that EUSD extension ever seeing the light of day.
If Mark had been right, which he isn’t, then payments out of Jersey trusts would have suffered EUSD tax at source and would have had to be reclaimed because of the settlor and beneficiaries being non-EU. That is unnecessary tax leakage even if it is fully recovered some time later. That’s a process which involves trustee time which the trust fund has to bear, and it’s unnecessarily tying up trust funds to pay tax which would never have been due in the first place. How does one “evade” an obligation which never existed to begin with?
I may well be in Jersey today. I may be in Singapore in due course to properly make trustee decisions from there.
And no, the EUSD does not “beat this” today, and won’t beat it in the future.
Ah the infamous ‘split mind’
We all know about those – the greatest fraud of the tax world – ‘I only make up my mind when I get off the place’ scenario
You show yourself a fantasist dissembler at best and as a result – and most certainly not a credible witness which is why I am drawing this to a halt
Which is what the EUSD will beat
Mark
What on earth are you in about?
I have simply countered your claim that a mythical and unlikely extension to the EUSD will apply to all trusts in Jersey, which is what you have claimed on previous threads.
As off your last paragraph, what on earth are you talking about?
Mark has never said it could apply to all trusts in Jersey.
I have decided to call a halt to this.
It’s very obvious now that you really do not have a clue about the EUSD Rufus – which in many ways I think good news!
Rufus..
Your statement “Anybody can carry out back office administration of a trust without even being regulated as a fiduciary” is shocking.
Administration of a trust is a fiduciary duty! Show me one web link to support your ridiculous assertion that unregulated Bob, Dick and Harry can administer a trust without threat of litigation from unhappy beneficiaries. You really live in cowboy land. Web links to your rose tinted world doesn’t count.
PS: I’m aware I spelled bear in mind wrongly.
Mark
Use your loaf please.
The trustees of the trust are the only people who can make trustee decisions, They are therefore the only people who hold fiduciary powers. Are you trying to say that a mere bookkeeper can make trustee decisions? Don’t be ridiculous.
If a Jersey trust comment outsourced the preparation of annual trust accounts to a local firm of accountants, as many in fact do, does that mean that the firm of accountants has fiduciary responsibility? Of course not.
The JFSC rightly regulates those who manage trusts and handle client monies in a fiduciary capacity – it does nor regulate bookkeepers and accountants!
Richard
Here you go again – close the debate when you and Mark meet your match and cannot justify your arguments. Pathetic and immature.
I have allowed final comments – including this final one
So let me offer the final note:
1) You are evading regulation – it’s the only explanation why you are paid. That may or may not incude tax
2) You claim only trustees can decide – which is risible – no trustee decides – they do exactly what their client wants – we all know that – no one would pay them if they took control of the assets – why would they do want someone to do that?. Any other claim is risible. You’re just puppets – and I’ve never met an offshore practitioner in UK who thinks otherwise of CI.
3) You claim you do back office in Jersey and go to Singapore to make decisions – please don’t tell such blatant untruths. You may go to sign – but your claim is just straightforwardly untrue – I suspect you take the minutes with you
4) You claim the EUSD does not concern you – and yet spend us ages telling us we’re wrong – so candidly I don’t believe you
5) You are ignoring what regulation says
Or to put it another way it’s no point engaging with a fantasist who creates a fabric of blatant untruths to hide the reality of what they do
That’s why I am stopping this
So I don’t get the right to reply to your ridiculous conclusions? As I said earlier, pathetic and immature.
If that’s what you honestly feel about how offshore trusts operate then you really are a total buffoon. Add that to your ignorance of constitutional relationships and you really are an ignorant and arrogant cretin.
Looking forward to tearing you to shreds in the media in 2012.
When you write in this way you surely show you have failed
As indeed did all your ‘arguments’
If you haven’t realised it so far you have proven:
a) You claim you can, personally, split back office functions in Jersey and trusteeship in Singapore and ne’er do the two overlap. No one would believe you, with good reason. I’d call that fraudulent misrepresentation.
b) You clearly are using Singapore to try to get round the European Union Savings Tax Directive even though you claim otherwise.
c) You are seeking to evade regulation, persistently.
d) There are banks and trust companies in Jersey in your opinion still acting fraudulently with regard to tax. It’s good to have insider confirmation.
e) That sham structures are commonly used – your own so called division of back office and trustee functions between locations when you admit you do both being one such sham.
In fact you have proven that the offshore world is working exactly as I contend.
It’s been well worth while winding you up to find that current confirmation that things are just as I have always contended.
No wonder you’re angry with me.
Thank you all the same.
And now, it is debate over. All that needs to be achieved has been.
Rufus
Show me where administration of a trust is not categorised as a fiduciary obligation. Bare in mind that I covered an extremely wide aspect of the EUSD from sharia products, annuities, insurance wrappers, foundations and establishments, nominee management and ownerships of IBCs, money laundering rules, derivatives, complex financial products, non UCITS, etc. So the confusion you and I are having in one minor area of trusts governed by foreign law versus trusts with bank accounts in other jurisdictions is just semantics.
Yes, I agree with you, as on my web site, that trusts in Singapore (governed by foreign or local law) not managed in EUSD territory and with no bank account to any EU related bank is out of scope… UNLESS managed within EUSD territory.. and your administration of that trust puts your whole structure at risk… and don’t think downplaying your role with the use of words of “backoffice” and “bookkeeping” alleviates your fiduciary responsibility of administering a trust.