At its height, HSBC’s secretive Swiss arm hid a total of $120bn (£78bn) in assets. These funds were collected from wealthy clients all over the world and have already led to criminal investigations and charges against the bank in France, Belgium, the US and Argentina. But in Britain, no legal action has been taken against HSBC and the evidence against it has never been made public until now.
Stan, when you post off-topic threads, can you select 'off-topic' from the options next to the title when you post it, to save us having o do it. Ta.
One huge problem is that people from banks/accountants/hedge-funds are drafted in as advisers by our government/s and help draw up financial legislation. They then return to the City armed with the knowledge of just how to circumvent that self-same legislation. It's a practice which is referred to as 'revolving doors'. (Then they figure in the Honours List.....)
I know what you mean Stan. But the issue here is Switzerland. A nation geographically in the centre of Europe that trades with it's European neighbours yet chooses NOT to be a member of the EU. And why do you think that is ? Because it would then have to adhere to certain banking regulations just like all other EU countries. Swiss wealth is underpinned by a secretive banking system that shields it's customers. I'm sure some of these clients do genuinely want privacy for innocent reasons but lets face facts, if you have something to hide then you bank in a country that has no scruples. And the Swiss have built a nation upon that.
Worked for them 2 years ago (for 3 years in finance)....worst job ever! This type of behaviour is embedded in their culture...they'll never change. Give it 1/2 years something else will come out that they've been trying to keep under the radar.
Dave Hartnett, head of tax at HMRC, left to work as a consultant with HSBC last year. Despite receiving 3000 cases via the bank whistle-blower, HMRC has prosecuted in only one instance (and that case was already under investigation when the info was received by HMRC).
Yes. Now just imagine for one moment that you're caught working cash-in-hand whilst on benefits. "You're nicked!" Sanctioned? Fined? Imprisoned?
The leaked HSBC Swiss files reveal how widely Britain’s unique “non-dom” tax concession is being exploited. The government says the controversial tax status is supposed to be to the nation’s benefit, by encouraging wealthy foreign investors to spend time in Britain. But the account records, previously a closely guarded secret, show that many other types of people have been exploiting its loose terms, and depriving the UK and other countries of tax revenue. People living in Britain who claim to be “non-domiciled” have to pay tax on UK income but are permitted to avoid other British taxes if they keep their fortune out of the country. They are considered to really belong to another nation, not Britain. But the leaked files reveal that many non-doms have been going a step further, and perfectly legally hiding those fortunes in HSBC’s Swiss private bank, behind a wall of bank secrecy. This makes it possible for some individuals to avoid taxes on their wealth anywhere in the world. The files also reveal the extent to which a whole new class of “hereditary non-doms” is emerging in the UK. These people inherit their non-dom status – HMRC generally recognises descent from the father – and get the tax advantage over other British residents even if they have been born, educated or lived most of their lives in the UK. Often they hold British passports. Non-dom numbers exploded during Tony Blair’s New Labour premiership. They doubled from 67,600 to 137,000 between 1997 and 2007 as his colleague Peter Mandelson pronounced that the government was “intensely relaxed about people becoming filthy rich”, so long as they paid their taxes. HSBC appears to have incited individuals to exploit non-dom status during this period. Italian footballer Alessandro Pistone said he was approached by his local HSBC manager while he was playing for Newcastle United, who successfully urged him to put a spare £1.5m into Switzerland. Pistone could claim non-dom status perfectly legally, he was told, and did not have to declare assets either to the UK or his native Italy. An HSBC manager noted hopefully on Pistone’s file: “I indicated that we were looking to offer our services to other persons who were Resident Non Domiciled … if he knew of other footballers.” When contacted by the Guardian, Pistone’s accountant said: “In respect of his Italian tax affairs … holding the monies in a Swiss bank account as opposed to an Italian bank account would mean that he would not have to account for Italian income tax in respect of any interest earned.” UBS banker Davide Tesoro, codenamed “Painter”, was another non-dom Italian living in London with up to £1.7m hidden in Switzerland. HSBC arranged for him to withdraw £120,000 in euros to buy a flat in Milan. His Swiss banker met him in London, writing: “He thought that the chances of the UK tax authorities passing on information on him to the Italian tax authorities, if and when he returned to Italy, were slim.” Tesoro said he did not want to comment: “It’s a private question between me and HMRC.” With other non-doms, there is no evidence of any intention to behave unlawfully but rather to legally gain the maximum advantage from the UK’s generous system. James Caan, one of the prominent stars of Dragons’ Den, the British TV programme featuring young entrepreneurs, is a non-dom, born in Pakistan. He was linked to an offshore trust with HSBC in Switzerland holding assets of up to £17m, although there is no suggestion of unlawful behaviour. Caan rowed with fellow Dragon Duncan Bannatyne, after the Scottish entrepreneur criticised him for getting an advantage over others as a non-dom. Caan was made a CBE this year. His lawyers say he “pays all UK taxes that he is required to pay”. Hereditary non-doms get a special sort of legal advantage. Tax solicitor Nigel Goodeve-Docker said: “One of the greatest inheritances you can get is the inheritance of non-domicile.” The Lewisohn banking family in London, for example, had the equivalent of more than £9m in Swiss accounts during 2006. Oscar Lewisohn was himself a non-executive director of HSBC’s Swiss bank until 2006. With a Danish passport, he was able to pass on the hereditary perk to his two UK-born sons. Lewisohn’s eldest son Mark is a senior banker at UBS in London, where he steered one of the biggest deals in corporate history for Vodafone two years ago. Born in London and Cambridge-educated, he holds a British passport and lives in the capital’s exclusive Holland Park district. The Lewisohns’ lawyers say: “Both children were at the same time Danish under Danish law and British under British law.” A notable hereditary non-dom businessman is the Soho House club owner and Tory donor Richard Caring, who kept more than £100m in Switzerland. His father was an American GI who settled in London. The Goldsmith family, heirs of the late financier Sir James Goldsmith, are the most high-profile group to have claimed hereditary tax breaks. Goldsmith distributed his £300m fortune offshore among 15 family members. Conservative MP Zac Goldsmith had to drop his non-dom claim when he ran for parliament in 2010, but his Tory donor brother Ben is still entitled to it. Ben declines to comment on his status. The HSBC files list the brothers as owners of a Cayman Islands company called Verton Holdings Ltd, which had assets of £6m. Their sister, the campaigner Jemima, has also now relinquished her hereditary non-dom rights. However, she lives at Kiddington Hall, a £15m Cotswolds mansion provided by the Goldsmith Swiss offshore trust. Key advantages of such trusts are that they can provide homes, cars and art collections, while avoiding inheritance tax and keeping family fortunes intact. “I could not bring the trust onshore even if I wanted,” she told the Guardian, adding: “My instructions to my accountant have always been clear – ‘Pay full tax and don’t play games.’” Other hereditaries include the philanthropic Potter family of London, who kept the equivalent of more than £70m in Switzerland. Thanks to their father, Psion computer firm founder David Potter’s South African background, the three sons can claim hereditary non-dom status, despite their British passports and London homes. Lawyers for one son with his own Swiss account, the 39-year-old Adam Potter, said he “has very strong connections with South Africa. He is married to a South African, his parents are South African … [he] has spent less than 2 of the last 7 years in the UK.” They said David Potter had also paid all required taxes, including many millions in the UK. Another philanthropic Londoner, the Tetrapak heir Sigrid Rausing, claims non-dom status thanks to her father Hans, who came to the UK from Sweden many years ago and is believed to be one of the richest non-doms in Britain. Born in Sweden, but educated and living in London, she had up to £12m in a Swiss account. Her lawyers say she “complies with all applicable tax regulations”. John Christensen, former economic adviser to the government of Jersey who now runs campaign group the Tax Justice Network, criticises hereditary arrangements. He said: “Many of these people live here for the vast majority of their lives and yet are given privileged treatment.” So many non-doms living in Britain were among those placing funds in Switzerland that in 2010, the pursuit of back tax from the HSBC leaks only brought in £135m for HMRC in London, much less than for other countries. Likewise the 2003 EU initiative to make Switzerland collect tax on hidden savingswas heavily undermined by the number of British non-doms who were granted exemption. Another wide-ranging treaty with Switzerland to encourage all Britons to come clean, which came into force in 2013, also proved a failure. The Swiss Bankers’ Association said: “This is mainly due to the fact that many clients have resident non-domiciled status. These clients are not liable to taxation in the UK and thus do not fall under the agreement.” One great advantage for Britain’s non-doms is that, when ticking the box on their tax form, they are not required to disclose the existence of any Swiss accounts, though any income brought into Britain does become liable to domestic tax. Many critics are now calling for radical reform. The non-dom loophole was intended, back in 1914, merely for “resident foreigners”. The popular image still is of non-dom Britain as a playground for exotic billionaires who invest here, such as Greek shipping tycoons or the Indian Mittal and Hinduja families. In minor reforms since 2008, such people have been made to pay an annual levy. But the reality revealed by the HSBC bank’s internal files is of a concession that is used by many more types of people than envisaged. “It’s a really archaic tax law that various governments have said they will repeal,” said Richard Brooks, a former UK tax inspector. “Gordon Brown, who became prime minister, famously said he was going to end these tax breaks in government and he never did.” http://www.theguardian.com/business...ession-is-being-exploited?CMP=EMCNEWEML6619I2
