Tax haven myths busted: legitimate reasons to bank offshore

  • mikepapa
  • 10/10/08 n/a (free)
  • a depositor
  • Offline
Posted: Thu, 07/05/2009 - 18:12

One of the biggest surprises for many of the thousands of Kaupthing, Singer & Friedlander Isle of Man depositors who lost access to their savings when the bank collapsed last October has been the lack of sympathy they have received.

.................. more

link

Shame we cannot seem to get articles like this in one of the National Newspapers.
PR anything you can do?

Kind regards,

Mike

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Sorry Folks - link for above article

  • mikepapa
  • 10/10/08 n/a (free)
  • a depositor
  • Offline
  • Thu, 07/05/2009 - 18:17

E-MAIL COMMENTS PLEASE

  • mikepapa
  • 10/10/08 n/a (free)
  • a depositor
  • Offline
  • Fri, 08/05/2009 - 11:28

There is no facility to post a comment on the above article, however we are all invited to e-mail comments to the author Helen Burggraf - please do so if we are to get a follow up story!

mailto: < iam(?)lastwordmedia [dot] com >

I e-mailed her and received a prompt and courteous reply as follows:

> Dear Helen,
>
> Thank you for your excellent article clearing up the misconceptions
> that most KSF IoM Expat depositors are Tax avoiding ‘Fat Cats’.
>
> For your further information I was directed to Derbyshire IoM ten
> years ago on the advice of Nat West UK – with whom I have banked for
> the past 45 years – because Building societies were quoting better rates than UK High Street Banks.
> Derbyshire was taken over by KSF and the rest is history!
>
> I maintain accounts both onshore and offshore with Nat West / RBS in England and Jersey.
>My deposits in KSF IoM were in addition to my Nat West / RBS accounts, so as not to have all eggs
>in one basket!
>
> Of the reasons you have given for expats banking off shore, one of the
> most important is to hold multi currency accounts - as I imagine few
> expats earn / are paid in GBP when working abroad. Indeed, in order to open a USD account
> with Nat West / RBS, I was required to bank with them Jersey.
>
> Simply put, as a long term British Expat [35 years], it would appear
> that HMG / George Brown is quite happy to turn a deaf ear to the loss
> of my life savings and many other KSF IoM expat depositors in a similar situation.
>
> Could you kindly forward your article to the National Newspapers and
> see if you can get one of your colleagues to follow your example?
>
> With kind regards,
>
> Mike
.................................................................................................................................................................................................................

Hi Mike,

I am overwhelmed at the response this story is getting from people like you! It is astonishing, particularly as it is written more for a business audience -- financial advisers with offshore clients -- than to a consumer audience. Given the magnitude of this response, I don't believe the deaf ear you described is going to be able to remain deaf for very long. Still, to the extent that we are able, given our audience and resources, we intend to follow this issue to the best of our ability.

Many thanks for your comments, and good luck, I am an optimist in most things and this in particular, though it is good to hear that all your eggs weren't in that particular basket...

Best wishes,

Helen

>


Reasons why depositing off-shore is now a no-no

  • Lucky Jim
  • 13/10/08 31/05/09
  • not a depositor
  • Offline
  • Fri, 08/05/2009 - 10:12

I can't see where this media outlet displays comments made to its posts. However I have posted the following comment in the hope it gives publicity to the KSFIOM debacle!


Banking savings off-shore is now high risk business. because:

  1. the small print only tells one half the story re security of deposits

  2. some regimes have no compensation scheme

3 those that have do not have FUNDED schemes - only a scheme 'just in case of the unlikely event of a bank going broke'

  1. the Isle of Man is in a position right now of AVOIDING its depositors' compensation scheme in respect of its Kaupthing bank collapse. Instead it has dreamt up a convoluted Scheme of Arrangement dreamt up by lawyers at a cost of £1,000,000 to make sure that the IoM government is protected at the expense of depositors

  2. Where a compensation scheme exists it can take years for depositors to get back their life savings

  3. in view of (5), relying on the marginal extra interest available on off-shore deposit accounts to fund pensions is high risk

  4. OECD protocol on Tax Information Exchange makes it easy for off-shore jurisdictions to sign up to it as it is presently just a 'paper tiger'. However 'the writing is on the wall' for off-shore centres as the OECD objective is to make tax avoidance through them less attractive.

signed: Jim


@mikepapa Offshore Accounts

  • IceCrusher
  • 14/10/08 25/10/11
  • a depositor
  • Offline
  • Fri, 08/05/2009 - 06:00

The article asks for other legitimate reasons for holding an offshore account; I sent the following. It's not mainstream, but every chance to retaliate must be taken!

Dear Sir,

One important and very practical reason for holding an offshore account is that all account information – including statements – are sent to the address in your country of work/residence. It’s all very well keeping an onshore account in the UK as an expat - providing you have an address – but most people either rent their home if they have one, or sell up. You would not expect to use your tenant to post-forward this vital information - which could also include debit/credit cards - and for similar reasons you would probably not wish to use the address of a relative (their ‘accidental’ discovery of your financial status could cause rifts!) On-line banking can alleviate this situation a little, but UK banks still require original signatures over the course of holding an account, and these will need to be sent from/to a UK address. An offshore bank has none of these problems because they are quite happy to post your documents to Timbuktu or wherever. For me and many of my expat colleagues, this is the most practical reason for holding an offshore account.

Mainstream UK media and others prefer to insinuate that offshore savers are ‘tax-dodgers’ as it is much more condescending and has conveniently allowed the UK Government to steal at least 50% of the Isle of Man depositors savings by holding their assets under Administration in the UK and distributing the remainder to the creditors of the UK Kaupthing bank – the biggest recipient being the FSCS/Treasury itself! One twisted way of recovering what they might see as the tax lost to them over the years perhaps…


Thanks to ICE

  • keving
  • 13/10/08 31/05/09
  • unspecified
  • Offline
  • Fri, 08/05/2009 - 07:38

Good to be reminded of other reasons why offshore accounts are used, one of course being the contact mailing address issue.

Also this note by ICE gives us a cold reminder of how at present we are only getting back 50% of our frozen funds, the other 50% probably going to HMG. Makes me ask myself again just who is the really big villain in this whole fiasco? We keep kicking the IOMG, and certainly our criticism is not unfounded, but who was it exactly that froze the funds in the first place and who is it that is keeping half of them for themselves?


@keving: Correct, this is the MORAL issue.

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
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  • Fri, 08/05/2009 - 08:08

Whilst HMG hide behind 'technicalities' the moral issue is clear. This is the jugular.

This is why we receive the limited support from the UK that we do.

It's the obvious focus, and it is the 'we're innocent, 'let's play ball with the victims' stategy that has been apparently arranged between the IoMG and HMT. Bell's recent political offensive, distractive play - "the UK is useless", playing right into this. It doesn't hold water. We need to apply pressure exactly on this point (Strategy: find a jugular and go for it).


Common Ground

  • keving
  • 13/10/08 31/05/09
  • unspecified
  • Offline
  • Fri, 08/05/2009 - 08:31

Not so sure about looking for jugulars. When it gets to that stage it gets legal and when you are up against the legal and media resources of HMG and IOMG it is a tough struggle.

But what about looking for common ground, a point made by expat on several occasions and a means that is usually ignored on this site. I see a crack in the door from the latest TSC meeting asking the IOMG and HMG to work together to resolve this issue. Why not hold both sides accountable to this request by the TSC, see it as a weapon on our side to get HMG and IOMG talking to each other in our best interests. There is not much external support for the return of our funds but I did find the TSC report sympathetic to our cause and this is a point worth building on but a point that is not much mentioned in this forum.


@keving: Multiple plays, integrated strategy.

  • follow_the_tao
  • 11/10/08 31/05/09
  • a depositor
  • Offline
  • Fri, 08/05/2009 - 09:23

This conversation theoretically ought to take place offline.
But why not in public? I'm in favour of transparency.

The problem as I see it the responsibility avoidance, and risk avoidance, and financial cost avoidance of the HMT, IoMG, banks and Ins. Cos. If they don't have to pay up they won't. The subtext is simply 'f*ck you, the weak go the the wall'. The IoMG is perfectly aware of this so there is no cost in saying this publicly, the social convention/political convention I'm crossing is that of the prohibition on revealing this reality.

My point, the only point that counts, is that we're not that weak! This is confrontation not agreement. You cannot negotiate if you don't have the cards, otherwise it's bluff. Are we playing poker, or is this real life?

As I said in a posting a short while ago I spent 90 minutes talking to IoM about the strength of a legal challenge, more or less. Reflecting on the conversation afterwards I was left with the impression that in sociological terms I'd been subject to what is referred to as 'cooling the mark out" (I suggest you do a search using first "sociology" and the "cooling the mark").

In another recent post I directly criticised "accomodative" strategies and apologist analyses.
This is a public post. In a adversarial situation/dialectic situation (to use a more politically sharp term) rolling over before you've begun simply doesn't make sense. Who has experience of serious adversarial negotiation here? I made clear in February my position, you cannot negotiate from weakness.
If Mr Bell is reading this, for all my public attacks I do understand his political stance (I don't like personalities like Bell's but I understand what he's doing). My position is simply how do we confront him?

Head to head! And I don't think Mr Bell takes prisoners. The question, and Mr Bell, and the UK Gov, are perfectly aware of this, the question is whether we are his match-

Can we "cut it?"

Sure I would be happy with a reasonable compromise, but currently the IoM is pulling my p********r.


Thanks Mike, interesting

  • expat
  • 10/10/08 31/05/09
  • unspecified
  • Offline
  • Fri, 08/05/2009 - 05:05

Thanks Mike, interesting article and useful in the next round of letters to HMG!!