Other

The Isle of Man has been criticised as a tax haven for Britons looking to dodge UK inheritance law.

Companies not registered in Britain do not have to pay stamp duty when a London property is sold or the 40 per cent inheritance tax when an owner dies in the Isle of Man.

This costs the city of London hundreds of millions of pounds each year and is increasingly attracting foreign firms looking to benefit from the British market but unwilling to be subjected to tax.

In 2011, companies based in the Isle of Man purchased £82.3 million worth of London property - up from £49 million in 2009.

Owen Smith, shadow exchequer secretary to the Treasury, has supported calls from Labour leader Ed Miliband for tax reforms in the Isle of Man, Geurnsey and the Jersey.

However, Isle of Man's chief minister Allan Bell has called claims from the UK Labour Party "ill-informed".

See also report on IOM radio 3FM: http://ht.ly/8Eitz

A communiqué from the government of the Isle of Man on Friday:
"THE Lord Mayor of the City of London, Alderman David Wootton, is visiting the Isle of Man next week to learn more about the Island’s role as an international business and finance centre."

Tax havens always deny being tax havens, and much prefer these rather grand titles such as ‘international finance centre,’ but anyway. ...

The work of the Serious Fraud Office in reducing financial crime could be improved if ‘recklessness’ was introduced as an offence, the investigator’s outgoing director has said.

Richard Alderman said a crime of recklessness would have to show an individual had the necessary knowledge and intent of pursuing a course of action, despite knowing the risks attached to this.

He said: “The public does not understand why it is that enforcement authorities such as the SFO have been unable to take action against senior financial people. They contrast the SFO with the US system.”
...
The SFO presided over several high-profile cases during 2011 including the start of an investigation into the collapse of the Kaupthing Banking Group ...

From Manx Radio:

A member of the United Kingdom parliament is defending the contribution offshore centres make to the British economy.

Writing on the Financial Director website, London and Westminster's Conservative member Mark Field says jurisdictions such as the Isle of Man, Jersey and Guernsey have been taking unfair criticism in the UK.

He says many small centres are stable, well-regulated and neutral jurisdictions which provide liquidity and investment opportunities to Britain.

Mr Field also dismisses claims the offshores engage in harmful tax practices, saying the The Foot Review showed that's not the case.

And he says the Isle of Man is currently among the highest rated jurisdictions globally for complying with international standards.

Comment:
anrigaut on 17/Nov/2011 11:02
Mark Field is MP for Westminster. The City of London is, by all accounts, the biggest 'offshore' centre of all. So it's hardly surprising he defends the activities of tax havens. That doesn't mean what he says is the truth. Awareness of the real harm done by the offshore system's facilitation of tax avoidance (and worse) is growing. Rather than trying to sustain the myth put out by the all-powerful finance industry and the government in thrall to it, Manx Radio might consider looking at the other side of the coin. A good place to start would be the recent "Tax Havens" thread on manxforums where some of the less fooled Manxies are beginning to raise serious and intelligent questions. As one of the contributors neatly put it: "Are we kidding ourselves? We know we are a tax haven. It's how we earn a living. We may wish it were not so but there it is." Now that at least was honest. http://www.manxforums.com/forums/index.php?/topic/49432-tax-havens/page_...

Ingvar Vilhjalmsson, the former director of the market trade division at Iceland’s (now bankrupt) Kaupthing Bank, now needs to repay the bank’s estate around ISK 2.6 billion (EUR 16.36 million) in loans which had effectively been written off.

Vilhjalmsson took the massive loans in the years running up to Kaupthing’s demise in order to buy shares in the bank. The Reykjavik District Court yesterday ruled that he must pay the money back. ...

The Supreme Court of Iceland yesterday ruled that the emergency law on prioritisation of bankruptcy claims will remain in force. In the specific case of Landsbanki, this means that British and Dutch claims to cover the Icesave debt can now be paid out. ...

Comment added (awaiting moderation)

Who exactly is proposing a loan trust to the IOM?

http://www.guardian.co.uk/business/2010/jan/26/sfo-raids-icelandic-firms

Icelandic tycoons at centre of SFO raids

Serious Fraud Office carries out series of raids on offices of firms linked to Lýdur and Ágúst Gudmundsson

• guardian.co.uk, Tuesday 26 January 2010 20.37 GMT

Simon Bowers

The Serious Fraud Office and counterparts from Iceland carried out a series of co-ordinated raids today on the offices of companies linked to Icelandic tycoons Lýdur and Ágúst Gudmundsson, including the Lincolnshire headquarters of Bakkavor, one of Britain's largest chilled food suppliers.

Before the banking sector meltdown brought the small north Atlantic island's economy to its knees in October 2008 the Gudmundsson brothers, both of whom have homes in Belgravia, were among Iceland's most influential and wealthy entrepreneurs. The holding company Exista, in which they hold a near-45% stake, was the largest shareholder in Kaupthing, Iceland's biggest bank, before its collapse.

But yesterday's raids are understood to be focused on other alleged activities at Exista. Among the actions under scrutiny is the sale of a major stake in Bakkavor by Exista to the Gudmundsson brothers shortly after the banking meltdown.

Raids in the UK were conducted by the SFO and British police at four addresses, including Exista offices in Paddington, at the request of Icelandic prosecutors and do not relate to investigations being pursued by UK authorities. Inquiries were sparked in part by a dossier on Exista that was passed to criminal prosecutors by administrators to Kaupthing.

Intelligence exchanges between the SFO and the Office of Iceland's Special Prosecutor Ólafur Hauksson have been building for months, but searches at UK addresses mark a new level of collaboration. Hauksson said he expected more UK raids to follow, relating to other inquiries in Iceland.

Meanwhile, Hauksson's team today carried out simultaneous raids at eight addresses in Iceland linked to Exista. In addition to their own lines of investigation, Icelandic prosecutors were carrying out a formal search request from the SFO relating to their inquiry into past activities at British sportswear retailer JJB.

A joint venture between Exista and businessman Chris Ronnie jointly acquired a 29% stake in 2007 in a deal financed by Kaupthing. Ronnie was later appointed to the JJB board, quickly becoming chief executive. He was suspended last year after it emerged the stake had been seized by administrators to Kaupthing.

The SFO announced in September that it is investigating suspected criminal price-fixing and fraud in the sportwear retail industry. It is focusing its attention on Sports Direct as well as JJB. JJB has negotiated immunity in exchange for whistle-blowing co-operation.

Bakkavor, the launchpad for the Gudmundsson brothers, began as a sleepy fish roe processing firm. In a series of Kaupthing-brokered takeovers in the UK it swallowed Katsouris Fresh Foods — a company five times its size in 2001, and four years later bought Geest,making it one of the largest suppliers of ready meals, pizzas, desserts and sliced fruit to Britain's supermarkets. A year later Laurens Patisseries was acquired from serial entrepreneur Andreas Liveras.

http://www.guardian.co.uk/business/2010/jan/26/sfo-raids-icelandic-firms

Icelandic tycoons at centre of SFO raids

Serious Fraud Office carries out series of raids on offices of firms linked to Lýdur and Ágúst Gudmundsson

• guardian.co.uk, Tuesday 26 January 2010 20.37 GMT

Simon Bowers

The Serious Fraud Office and counterparts from Iceland carried out a series of co-ordinated raids today on the offices of companies linked to Icelandic tycoons Lýdur and Ágúst Gudmundsson, including the Lincolnshire headquarters of Bakkavor, one of Britain's largest chilled food suppliers.

Before the banking sector meltdown brought the small north Atlantic island's economy to its knees in October 2008 the Gudmundsson brothers, both of whom have homes in Belgravia, were among Iceland's most influential and wealthy entrepreneurs. The holding company Exista, in which they hold a near-45% stake, was the largest shareholder in Kaupthing, Iceland's biggest bank, before its collapse.

But yesterday's raids are understood to be focused on other alleged activities at Exista. Among the actions under scrutiny is the sale of a major stake in Bakkavor by Exista to the Gudmundsson brothers shortly after the banking meltdown.

Raids in the UK were conducted by the SFO and British police at four addresses, including Exista offices in Paddington, at the request of Icelandic prosecutors and do not relate to investigations being pursued by UK authorities. Inquiries were sparked in part by a dossier on Exista that was passed to criminal prosecutors by administrators to Kaupthing.

Intelligence exchanges between the SFO and the Office of Iceland's Special Prosecutor Ólafur Hauksson have been building for months, but searches at UK addresses mark a new level of collaboration. Hauksson said he expected more UK raids to follow, relating to other inquiries in Iceland.

Meanwhile, Hauksson's team today carried out simultaneous raids at eight addresses in Iceland linked to Exista. In addition to their own lines of investigation, Icelandic prosecutors were carrying out a formal search request from the SFO relating to their inquiry into past activities at British sportswear retailer JJB.

A joint venture between Exista and businessman Chris Ronnie jointly acquired a 29% stake in 2007 in a deal financed by Kaupthing. Ronnie was later appointed to the JJB board, quickly becoming chief executive. He was suspended last year after it emerged the stake had been seized by administrators to Kaupthing.

The SFO announced in September that it is investigating suspected criminal price-fixing and fraud in the sportwear retail industry. It is focusing its attention on Sports Direct as well as JJB. JJB has negotiated immunity in exchange for whistle-blowing co-operation.

Bakkavor, the launchpad for the Gudmundsson brothers, began as a sleepy fish roe processing firm. In a series of Kaupthing-brokered takeovers in the UK it swallowed Katsouris Fresh Foods — a company five times its size in 2001, and four years later bought Geest,making it one of the largest suppliers of ready meals, pizzas, desserts and sliced fruit to Britain's supermarkets. A year later Laurens Patisseries was acquired from serial entrepreneur Andreas Liveras.