Offshore companies

[Clitheroekid]

I've just been reading yet another depressing report of fraud carried out by bent lawyers and their associates. The case was brought by Baroness Jacqueline von Zuylen against a (now struck-off and imprisoned) solicitor called Rodney Whiston-Dew.

She had `invested' over £2m in a trust that had supposedly been set up by him, and, needless to say, most of her money disappeared, and she's suing both him and a company to which the funds were diverted for her losses. As he is apparently bankrupt and the company appears to be insolvent I'm not quite sure that spending, at a guess, £100k + on suing them was sensible, but that's another story.

The full judgment is here, but it's heavy going - https://www.bailii.org/ew/cases/EWHC/Ch/2021/2219.html

Whiston-Dew was one of several fraudsters who were sentenced back in 2017 - https://www.moneyandme.co.uk/ethical-in ... s-in-jail/ And yet again, the common thread running through this case and so many other cases I've read about is the use of offshore companies as instruments of fraud.

It's the same when reading reports about oligarch litigation, which is rife in London. People who have stolen hundreds of millions from state coffers or gullible citizens are easily able to park their money in companies in places like the Seychelles, Nevis, the British VIrgin Islands etc, not forgetting the Channel Islands - sunny places full of shady people. It should be a matter of shame for the Government that so many of them are ex-British colonies, and still, I assume, members of the Commonwealth.

A few years ago, it was estimated that about £200 billion worth of property in England and Wales was owned by offshore companies - https://www.private-eye.co.uk/tax-havens This largely defeats the `open register' policy of the Land Registry, which is based on the principle that ownership of land should be transparent. If land is owned by an offshore company it's usually impossible to determine who actually owns it.

I've therefore come to the conclusion that the use of offshore companies needs to be much more heavily regulated. In fact, I would personally be inclined simply to ban the use of such companies altogether. This would mean that it would be illegal to transfer money to or from them, and they would be prohibited from owning any assets in the UK.

I realise that the armies of highly paid tax-advisers would squeal that such companies are `part of legitimate tax-avoidance', but if it prevented a few very wealthy people avoiding tax I would think that a price worth paying in order to make it much more difficult for crooks to hide their stolen money.

Any views?

[UncleEbenezer]

spending, at a guess, £100k + on suing them was sensible, but that's another story.

Sounds far too cheap for playing with lawyers!

A fox may steal your hens, Sir,
A Whore your health and Pence, Sir,
Your daughter rob your Chest, Sir,
Your Wife may steal your Rest, Sir,
A Thief your Goods and Plate.

But this is all but picking,
With Rest, Pence, Chest, and Chicken,
It ever was decreed, Sir,
If Lawyer's Hand is fee'd, Sir,
He steals your whole Estate.

I've therefore come to the conclusion that the use of offshore companies needs to be much more heavily regulated. In fact, I would personally be inclined simply to ban the use of such companies altogether. This would mean that it would be illegal to transfer money to or from them, and they would be prohibited from owning any assets in the UK.

I realise that the armies of highly paid tax-advisers would squeal that such companies are `part of legitimate tax-avoidance', but if it prevented a few very wealthy people avoiding tax I would think that a price worth paying in order to make it much more difficult for crooks to hide their stolen money.

Any views?

Never mind the tax advisors. Just think of the effect on party donations! Not to mention direct and indirect interests of (an unknown number of) our individual legislators and their backers. Above all, the effect on London as financial centre of regulating out important money-laundering tools!

[dionaeamuscipula]

It's the same when reading reports about oligarch litigation, which is rife in London. People who have stolen hundreds of millions from state coffers or gullible citizens are easily able to park their money in companies in places like the Seychelles, Nevis, the British VIrgin Islands etc, not forgetting the Channel Islands - sunny places full of shady people. It should be a matter of shame for the Government that so many of them are ex-British colonies, and still, I assume, members of the Commonwealth.

In fact many of them are British Overseas Territories, with the Queen as head of state and with the British Government responsible for things like defence and foreign relations. Their populations are British Nationals.

https://en.wikipedia.org/wiki/British_O ... erritories

Their existence as offshore tax havens is suspiciously convenient for succcessive UK governments who can feign horror and disappointment at the existence of such a thing, while quietly allowing them to provide significant benefits. I believe that the excuse for their continued existence is that their economies would collapse were it not for their income from financial services.

There are some cases where they are needed such as for things like employee benefit trusts which, if set up in the UK, could attract tax on an unfair basis.

DM

[UncleEbenezer]

There are some cases where they are needed such as for things like employee benefit trusts which, if set up in the UK, could attract tax on an unfair basis.

DM

If true, that would seem to imply a defect in UK law. So the solution to a wrong is to pile on a second wrong?

Yes I know that's distressingly often genuinely the case in our law. Like that idiotic recent-ish headline "upskirting" thing, because existing laws on bullying and harassment were, for some reason, inadequate to offer redress to a victim.

[9873210]

Their existence as offshore tax havens is suspiciously convenient for succcessive UK governments who can feign horror and disappointment at the existence of such a thing, while quietly allowing them to provide significant benefits. I believe that the excuse for their continued existence is that their economies would collapse were it not for their income from financial services.

In the of the rest of the world the city of London is regarded as a haven for money launderesses, thieves and tax evaders. Her Majesty's Government's reason for not making changes is exactly the same.