Press

THE Isle of Man has become ‘collateral damage’ in a wider debate going on in UK politics, Chief Minister Allan Bell told MHKs – adding that he was determined to enhance the island’s relationship with Westminster. ...

"LABOUR leader Ed Miliband is demanding the UK government forces the Isle of Man, Jersey and Guernsey to reveal the identity of British tax evaders with money ‘hidden’ in the islands, it’s being reported today (Sunday).

Miliband, under fire over a lack of strength in his leadership of the opposition party, is said to be preparing to call this week for negotiations to begin and will demand ministers follow up the talks with a threat to put the islands on the Organisation for Economic Co-operation and Development blacklist.

He claims the move could raise £2.4 billion for the UK exchequer."

See also BBC report and video here: http://www.bbc.co.uk/news/world-europe-isle-of-man-16578469

" MOVES by the UK Treasury to introduce a general anti-avoidance tax rule could impact negatively on the Isle of Man.

That’s the view of KPMG director Greg Jones who was responding to the announcement by Deputy Prime Minister Nick Clegg that he hoped there would be progress on an anti-avoidance tax rule in the Budget. ...
...

KPMG island director Greg Jones said it was by no means a foregone conclusion that we would get a general tax anti-avoidance rule (GAAR) in the near future.

But he added: ‘If we did, however, there’s no doubt that it would impact negatively on places like the Isle of Man.

‘Even if the GAAR were targeted as narrowly as the working party report recommends, in my view it would strike out a number of (what has to be admitted are) fairly contrived tax planning arrangements I am aware are promoted from the island.

‘There may be some work for tax practitioners in advising whether a particular planning idea falls within the GAAR’s scope, but on the whole I think we’d lose a certain amount of the business currently being undertaken by some niche service providers.’ "

See also Richard Murphy's blog:
"KPMG in the Isle of Man admits the island may be used for egregious tax avoidance" at
http://www.taxresearch.org.uk/Blog/2012/01/14/kpmg-in-the-isle-of-man-ad...

COULD the international pressure on the island be easing at last?

Over the past five years, our financial services, tax rates and Customs deal have come under intense scrutiny from beyond our shores.

We’ve had the EU question our corporate tax regime, the painful revision of our VAT deal twice in two years, an inquiry commissioned by the Westminster government has run the rule over our ability to withstand financial shocks and the OECD has reviewed our tax transparency and co-operation.

It seems that barely a week went by without another brickbat being lobbed our way by Brussels, London or Washington.

But now as 2011 comes to a close, there is a tangible feeling that international relations have turned a corner – and the pressure on us, at least for the time being, has abated.
...

By Tony Shearer, former chief executive of Singer & Friedlander

The report states: “The FSA’s overall pre-crisis supervisory approach was inadequate with, in retrospect, an overly reactive approach and insufficient data available to supervisors to assess prudential risks fully.”

So Hector Sants, chief executive, had no idea that the whole of the FSA’s approach was flawed.

This is precisely the warning I gave to Callum McCarthy, then chairman of the FSA, in March 2005. Back then I invited him to visit Singer & Friedlander to see at first hand how the FSA regulated what I called “trivia and minutiae” and paid no regard to the possibility of “systemic failure of the banks” (which was one of only two of the FSA’s objectives).

This week the Bank of England said it had “every confidence in Hector Sants” and looked “forward to him joining us as deputy Governor in 2013”. Even today the Bank of England has no idea what happened and what the FSA is supposed to be doing. They are not the right people to regulate the banks.

Given that RBS is only one of the FSA’s failings, when will the FSA publish its reports into its failure to regulate other banks such as Kaupthing Singer & Friedlander (where depositors have lost money) and HBOS? ....

"The Isle of Man has been on Spain's blacklist of high-risk jurisdictions since 1991, though according to Manx politicians this has more to do with politics than the Isle of Man's credibility as an international finance centre.
...
It is hoped that the signing of the TIEA (Tax Information Exchange Agreement), currently awaiting approval from the foreign ministry in Spain, will reboot relations between the two jurisdictions and facilitate business flows between the Isle of Man and Spain.
...
What frustrates Manx politicians most about the blacklisting is that the Isle of Man has been recognised by the G20 as a front-runner in the crusade to stamp out tax evasion.
..."

See also comments - recommendations welcome!

See also here: http://www.isleofman.com/News/article.aspx?article=41826

and here: http://www.iomtoday.co.im/news/isle-of-man-news/isle_of_man_caught_in_sp...

Martin Wolf's Exchange:
"Iceland was the first country devastated by the financial crisis. ...
On October 27 2011, I attended a conference jointly organised by the IMF and the government of Iceland to celebrate Iceland’s graduation from the programme and evaluate the outcome of the rescue. ... "

A Spanish lawyer has taken legal action against ten banks, including British bank Rothschild, for their funding of equity release schemes that have left hundreds of British pensioners at risk of losing their homes in Spain.

It represents a test case for at least 800 British pensioners across France, Spain and Portugal who bought into equity release schemes in the belief that by remortgaging their properties and allowing the money to be invested offshore, their children's inheritance tax liability would be mitigated while they would receive a lump sum and a regular investment return to cover the new mortgage. ...
...
While Guernsey-based NM Rothschild & Sons accepts it provided loans to a number of pensioners to fund the remortgaging of their homes and the investment in offshore funds, it has distanced itself from the advisors who brokered the equity release schemes.

A spokesman for Rothschild said: “Rothschild is confident that the Spanish courts will agree that there has been no wrongdoing on its part in relation to allegations being made against a number of banks by a lawyer in Spain.

"Whilst Rothschild has previously provided loans to a number of Spanish property owners its role was as a lender only. The bank had no part in providing investment or tax advice to borrowers. The borrowers were advised by their IFAs in Spain, who received no commission from the bank.”

MONEY which councils invested in Icelandic banks which then collapsed during the credit crunch is pouring back into authority coffers.

And individual savers who saw millions of pounds frozen by Iceland's financial collapse are also seeing far higher returns than had been feared.

Yesterday, a ruling in the country's supreme court led to East Staffordshire Borough Council announcing that it expected to get back "almost all" of the money it invested in Landsbanki.

Amber Valley Borough Council revealed it had already received 73% of the £1 million it had invested in Kaupthing.

And investors whose accounts were passed from a Derbyshire Building Society subsidiary to an offshore Icelandic bank before its collapse reported they would get much more cash back than expected.

Savers with Derbyshire Offshore were left out of pocket after the building society passed on their accounts to Icelandic bank Kaupthing, Singer and Friedlander (KSF) Isle Of Man.

Among those left panicking by the crash were Leonard and Kathleen Orton, now aged 79 and 84, of Alresford, Hampshire, who feared they would lose £190,000 of their £290,000 investment.

But Mr Orton said the future was now looking brighter. He said: "We are expecting to have had 80% back by the end of this month and 90% by 2014.

"Obviously we would prefer to get 100% with interest but you can't help but feel pleased."

Yesterday's Icelandic Supreme Court ruling means that Landsbanki, another of the collapsed banks, will give priority to UK investors when it hands back people their cash.

One of those was East Staffordshire Borough Council, which was due to see its investments mature in 2009.

Chief executive Andy O'Brien said: "This judgement means that UK authorities' claims have been recognised as deposits with priority status over other creditors' claims.

"We anticipate that our investments will be paid back first and we should recover almost all of the money we deposited with Landsbanki."

The authority also had £2million invested in Kaupthing, Singer and Fried- lander and says more than half of this has been recovered.

A spokesman for Amber Valley Borough Council said 73% of the £1 million it had invested in KSF had already been returned and that it was due to get 84%.

"IN a night of shocks, the ousting of Treasury Minister Anne Craine was the most seismic of the 2011 general election.

Mrs Craine, who some had tipped as a possible future chief minister, was one of three cabinet members to lose their seat. ... "

Unlikely to help us much now, but my does it feel good!