Ever since the G20, I’ve known what it feels like to be a doctor. Everybody wants your diagnosis on their particular financial malady imaginary or real.
E ver since the G20, I’ve known what it feels like to be a doctor. Everybody wants your diagnosis on their particular financial malady — imaginary or real. Whether it’s their concerns about that little account in Liechtenstein which they will shortly have to disclose under the new Liechtenstein Declaration negotiated with HMRC, or whether they should fess up to that account in the Cayman Islands which could get them a lesser penalty under the terms of the 2007 government amnesty, it’s my humble editor’s opinion that people strangely want to hear.
In our special series of reports on the new regime of tax terror being practised on the rich by the likes of Brown and Sarkozy, we offer an overview of the situation, and here Roderick Balfour, founder of the Virtus Trust and one of Britain’s leading off-shore tax advisers, makes some perceptive suggestions (not the least is that in the current climate the ‘industry’ prefers to use the term ‘tax-conscious rich’ to describe its tax-evading clients).
On a similar theme, I’m delighted that wealth management guru Bruce Weatherill has written for this issue, boldly exposing the naked failings of the private client industry and revealing how shamefully so many bankers, lawyers and soi disant ‘asset managers’ have betrayed their clients — while lining their own pockets — over the past decade.
Yet despite Brown’s claim at the G20 that the era of banking secrecy is ‘over’, London’s tribe of tax-evading rich should not start sweating too hard quite yet. The secretive world of tax havens have always been one step ahead of the politicians and this latest bombastic battery on their defences is a siege that they are very capable of withstanding.
In the next few months, Spear’s will be at the vanguard of informing readers about the latest developments in the often murky world of offshore finance. After a global tour of bad boy tax havens, we will be publishing our guide to the world’s best, worst and and most uncooperative tax havens, from Macao to Monaco, with a comprehensive rating system.
With the likes of former enfants terribles of the offshore world such as Monaco, Liechtenstein, Luxembourg and Switzerland all being pressurised and bullied by the OECD to become ‘tax-compliant’, a whole slew of new tax havens are being auditioned and reviewed by the international rich — and their advisers. Our guide should hopefully save our wealthy, tax-conscious readers many tens of thousands of pounds in charged legal hours.
Of course, the 50 per cent tax hike for those earning more than £150,000, the tax-haven issue and the new reign of tax terror practised by the G20 countries have largely been a convenient diversion from problems at home. The rich are an easy target today, not the least as there is now a real sense of an anti-rich popular revolution in the air. The revelations about taxpayers funding moats and manure have not helped.
Online fashion store Net-a-Porter have recently introduced a new buying service that allows you to have your designer shopping delivered in a brown paper bag. At the anti-G20 protests that I observed first-hand, it was clear from the banners and placards waved around by the thousands of marchers that it was anybody who was rich, not just the bankers, who were the target of populist fury.
As the summit ended, The Economist went to print with a cover that screamed ‘Get The Rich!’, featuring a battle scene from the French Revolution superimposed on a backdrop of Canary Wharf. Likening the new rage against the new breed of super-rich to the anger felt by the 18th-century mobs that railed against the Them and Us injustices of France’s ancient regime is not far off the mark. As Harvard professor Dominique Moisi has recently pointed out: ‘Are not senior bankers today like the aristocrats of yesterday, their privileges no longer justified by their social functions?’
There is some truth in this. I, for one, won’t be sorry to see any bankers or hedgies fleeing our blessed plot in order to save themselves a few pennies; the reality, of course, is that they won’t actually leave at all.
The whole tax-haven issue is mostly political posturing which will end up changing very little. Yes, there will be some changes, and — in the case of the likes of accounts held by dictators such as Saddam Hussein or dubious oligarchs who have plundered from their countries and opened billion-dollar accounts with the spoils — it is only right that the banking authorities in countries such as Monaco and Switzerland tighten up their laws with regards to sharing information regarding criminal clients.
But the real issue that is not being addressed is how an attempt to close down these financial offshore centres would be disastrous for the global economy at a time when money needs to flow and when entrepreneurs, businessmen and corporations need to feel they can move money around freely. Paralysis of the offshore banking system is very last thing the financial world needs.
A few weeks ago I got a call from my old friend Henry Dent-Brocklehurst, co-owner of Sudeley Castle, who had an unusual reader’s request. In short, he wanted to know if any of our readers — especially anybody who had lost their job in banking or wealth management and wanted to put their feet up while writing the next Liar’s Poker — might be interested in a free year’s ‘sabbatical’ house-sitting his mother Lady Ashcombe’s large and luxurious villa in the hills of southern Spain. Elizabeth Hurley has stayed there and I’m told it is very grand and comfortable. So I am more than happy to help.
This unusual opportunity for doing precisely nothing for a year (wife/girlfriend/mistress welcome) comes with the following job description: ‘Recently retired? Sacked? Crunched? Thinking of writing a book? Attractive 2/3 bedroom independent flat in stunning, large finca in Andalusian hills offered rent-free for one year in exchange for light management duties.
‘Would suit responsible, financially independent, computer-intelligent couple who would like to escape the gloom of the crunch in beautiful, peaceful and healthy surroundings.’ Anybody interested please email me and I will pass it on. That is if I haven’t already applied myself.