Government prepares offshore bank account tax

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2008-12-11 (All day)

Savers with money in tax havens such as Guernsey and the Isle of Man could be forced to pay tax on their offshore bank accounts to fund a deposit protection scheme. Industry experts believe that the measure may be announced as part of a government-backed review into offshore financial centres...

Action groups set up by savers have accused the Government of ignoring their plight after the Treasury refused to bail out those with offshore accounts, as it had done for Icesave customers in the UK. Alistair Darling has stood firm against the compensation calls, but has hinted that change may be afoot. He said: “The recent financial turbulence has highlighted potential problems with overseas territories and crown dependencies, such as the Isle of Man and Channel Islands. They attract banking customers with lower taxes, without contributing to the UK Exchequer. The British taxpayer cannot be expected to be the guarantor of last resort. But at times of stress, depositors need to know who will compensate them.”

The offshore review got under way last week and is being lead by Michael Foot, previously managing director of the Financial Services Authority. It will cover Jersey, Guernsey, the Isle of Man, Bermuda, the Cayman Islands, Gibraltar, the Turks and Caicos Islands, the British Virgin Islands and Anguilla, but not Luxembourg.