I watched David Starkey's programme on TV on Saturday about the end of Elizabeth I's reign, when the Court, and special monopolies granted by the Court became corrupt, in what he said we knew very well from our own time by the word "sleaze". It was not that the monopolies were necessarily illegal, as they were granted by the Queen's Court, but the manner in which it was done that seemed to the Parliament of the day to be unethical.
It came to mind when I was reading "Private Eye" - the "In the City" section, which manages to feature Jersey once more in an article that makes some Jersey finance companies look "sleazy".
"We do pay all our taxes in Britain. I am a UK taxpayer, My wife is not a tax exile. My family do not live in the UK. It is somewhat different". So declared an increasingly irritated Sir Philip Green last week as he was quizzed on BBC Radio 4's Today programme about his suitability to advise the government on how to cut waste. The Topshop billionaire was keen to stress just how much tax he and his companies pay, if less keen to talk about how much was paid by his Monaco-based wife Lady Tina. Green pays UK tax on the £1 m-plus salary he gets for running the Arcadia Bhs empire while commuting every week from Monaco - an empire legally controlled by "Lady Christina Green and her immediate family"
Private Eye notes that by keeping Lady Green out of the U.K., and non-resident there, she is liable to the U.K. tax in the same way as her husband is, and this is perfectly legal:
Although there have been no dividends since the £1.2bn payment received in 2005, those offshore structures are a gift that keeps on giving. Last year, when Bhs was merged with the Arcadia group, the £201 million acquisition price tag was paid in loan notes to offshore companies that now receive an enviable 8 percent annually for the next 10 years. These contortions are all perfectly legal because they took place after Tina Green left the UK with her husband and then stayed away for five years to establish non-resident status.
While they are husband and wife, because they are taxed separately, and she is non-resident, this means a considerable sum of money is received by her (and presumably available and spendable by both of them) without having to pay any UK tax.
Totalling more than £422m, almost all those dividends.. went tax-free to his family accounts via companies in Jersey (Green's Global Textiles Investments is based there) and the British Virgin Islands. Had those dividends been paid to a UK-resident individual, the potential tax liability could have been up to £120m.
The takeover of BHS, which involved loan notes routed via offshore companies, also managed to save the Green's tax bill. Because of her status, and being the only director of the Jersey company, there is no tax liability, even though the control of the company is described as being both her "and her immediate family" - which presumably includes her husband.
The Arcadia takeover was executed through another Jersey-based vehicle, Taveta Investments, controlled by... yes, "CS Green and her immediate family". Tina Green is the only director of the Jersey-registered Taveta Ltd, which controlled the bid vehicle. In 2005 Taveta Investments paid a £1.3bn dividend, of which 92 percent - or just under £ 1.2bn - went to the Green family company in Jersey. Had this been paid to a UK-resident individual, the tax liability would have been up to £360m
When matters like these reach the attention of the public, however much good will is done by regulatory inspections of Jersey company affairs, and signing up to Tax Information Exchange Agreements, being on the OECD white list, the perception is that Jersey is a place which facilitates legal tax avoidance.
The perception that comes to light is that this may involve, as in the case of the Greens, a use of offshore company vehicles that while strictly legal and above board, may be of questionable morality, and taints the reputation of Jersey - at least as far as the British public are concerned. They see clever people exploiting a legitimate loophole which is simply unavailable for ordinary people and which to them, as with the writer in Private Eye, is clearly not fair.
There is a gap between what is seen as fair and what is counted legal, and if Jersey is to maintain its deservedly international reputation, it must show that it is taking steps to lessen that gap.
1917: Cliément d'Caen et ses patates (2) - Siette et fîn dé ch't' histouaithe. *The conclusion of this story.* *(Siette et fîn)* - Eh bein sé-m'n'âge! se fit Cliément, eh bein sé-m'n'âge! - Et le v...
1 day ago