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Tax and Jurisdictions

Last week’s UK budget has been widely seen as a political budget designed to set the parameters for the country’s general election, due next year. Chancellor Alistair Darling’s headline-grabbing increase in interest rates for the wealthy (the top rate is now 50%) was certainly a knee-jerk reaction to political rather than economic problems.

The UK has long been known as a tax haven for foreign nationals looking for a low tax jurisdiction.But despite the benefits of the old rules, a new set of highly complicated rules kicked in as of this week which will be costly to monitor and stay within, for those who wish to remain in the UK.

New tax haven lists published by the OECD last night in the wake of the G20 London summit will drive more family office business towards the Channel Islands and the Isle of Man.

The French government has named family-controlled tyremaker Michelin as one of three businesses it wants to investigate for alleged tax fraud.

If you believe the OECD’s rhetoric, tax havens are about to collapse like a house of cards before the onslaught of a G20 determined to retrieve untold trillions of lost revenue. However, the death of tax-efficient jurisdictions and their historic rules on confidentiality is greatly exaggerated.