If the Wildensteins were in the UK, they'd be receiving Post-it notes from the Revenue, writes Colin Senez.
For those of you who are unaware of the Wildensteins (or as they are known in France – 'Les W'), the family is known for holding one of the most substantial art collections in the world. For over a century, the Wildenstein family have accumulated paintings by artists including Fragonard, Cézanne, Degas, Monet and Picasso – among others. The collection was originally started by Nathan Wildenstein in Paris in 1870 and has grown to what some say is now the greatest art collection on earth. However, Les W are notoriously secretive about the contents of the collection.
Daniel Wildenstein (Nathan’s grandson) died in 2001. Guy and Alec Wildenstein (Daniel’s sons) declared that they inherited only about $60 million from their father. However the French fiscal authorities estimate that Les W are worth much more, and consider that they are owed over €500 million in unpaid taxes.
The French government has alleged that when Daniel Wildenstein died, most of the family’s estate had been transferred into trusts based in the Bahamas, Guernsey and the Cayman Islands. The assets in the trusts purportedly include properties in New York, a 30,000-hectare ranch in Kenya, racehorses, and a jet in addition to hundreds of valuable paintings and other artworks. While it is asserted that the paintings were held by offshore trusts, prosecutors say that, many of them in fact remained in the family’s vaults in Switzerland.
And how, you may ask, did the French Authorities learn about this? The initial investigation grew out of an accusation within the family itself; Guy’s stepmother, Sylvia Roth Wildenstein, turned over documents to the authorities when she thought it was she, rather than French taxpayers, who was being cheated out of the estate.
Now, if we take transport ourselves from Paris to London we may ask how our own authorities might seek to collect these monies without the help of a disenchanted stepmother. What are the latest developments in the UK from a tax investigatory perspective? It seems as if HMRC is relying more on 'nudge' rather than 'grudge' tactics – in the form of Post-it notes.
HMRC is apparently sticking Post-it notes on letters addressed to tax payers, saying something along the lines of, 'Please give me a call, if you would like to discuss,' followed by a first name and telephone number.
HMRC is constantly trying to improve the tax gap, and is clearly pulling out all the stops to entice taxpayers to report and pay their tax on time. HMRC is using the tactics set out by the Behavioural Insight Team, established in 2010. It produced a report that looked at the effectiveness of adding handwritten Post-it notes in the US.
The report said: 'A US study shows that people are more likely to respond to messages indicating extra effort and a personal touch, for example through handwriting a taxpayer's name or using Post-it notes to summarise the request'.
As I glance over at the unused post-it notes on my desk, I am drawn to consider just how much power this coloured temporarily adhesive paper offers me.
Colin Senez is an associate at boutique private wealth law firm Maurice Turnor Gardner LLP.