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Storms are brewing for the offshore havens

The pre-Budget report identifies the crown dependencies as a thorn in the side of the UK’s “world-leading financial centre”.

Chancellor Alastair Darling claimed this was because they “attract banking customers with lower taxes without contributing to the UK exchequer” despite the taxes payable by a UK-resident offshore banking client being the same wherever they bank.

It is right that the crown dependencies come under the spotlight as they are 20 years or more behind.

No disclosure, rudimentary systems and controls, flimsy TCF that allows unqualified and unregulated salespeople to globally distribute their often complex products with often very limited terms and conditions which leave cli- ents completely in the dark.

I suspect that a closer examination of offshore centres will find wide-ranging areas where the onshore rules have been turned on their head by the offshore arms of some of the UK’s best-known financial institutions – not only investor compensation schemes but also Qrops, bond sales, international corporate tax structuring and, of course, personal tax and trust planning.

A key PBR theme was that many of the UK’s problems were global and restoring confidence means strong regulation, leadership and government.

There cannot be a better place to start than in jurisdictions that trade on our onshore reputation in traditional offshore ways. One thing is clear, Whether for the right reason or not, the crown dependencies can expect some severe spring storms when the report into their regulatory arrangements is released.

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England vs Australia: pensions

Well, the cricket season is here, and England and Australia are stepping up to the wicket. Although we compete with each other in the sporting world, when it comes to pensions, Australia’s pension programme is held up as a model for our auto-enrolment initiative. Auto-enrolment was introduced because people weren’t saving enough into their pensions, and it is still early days but signs are positive. However, in Australia, saving into a pension is compulsory, and in fact employers are the ones who have to pay in. Employees in Australia can make additional contributions into their pensions, but they don’t have to. Should the onus be on the employer or employee to save? Well in the UK we think it’s both, but to get ‘adequate’ savings for retirement it’s the employee who has to pay more in.

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