British tax havens under threat from UK government

British, American and EU member state overseas territories seen by many expats as tax havens are increasingly falling under new disclosure rules set out by the UK and USA governments.

British Overseas Territories such as the Cayman Islands, Bermuda, the Virgin Islands, Montserrat and even the Isle of Man have capitulated to the disclosure demands of the UK government, although Jersey and Guernsey are not yet involved. The US is targeting Switzerland and the EU is demanding what it calls ‘fair tax practice’.

For expats with bank accounts or investments in these places and who are not involved in illegal practices, the end game of this erosion of privacy is a disturbing trend. The disclosure of legitimate bank account holdings or investments to a faceless government seems to many to be a very thin line which could easily be crossed, especially given the precedent of the recent Cyprus savings grab.

Worse still, the sting in the tail of the disclosure is the requirement to specify what the cash in the bank account is being used for. Given the example of the recently disbanded and restructured UK Border Agency, how much confidence can savers and investors have in the public sector worker menials who will be dealing with the information.

The UK government allows onshore bankers, huge corporations, the mega-rich and the banks themselves to evade taxation by the billion without any restriction. Tax evasion is against the law but, in this instance, hitting on everyday expats with offshore accounts in a manner severely prejudicial to their privacy seems unfair at the least.

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