Every now and then, a court case comes up that gives curious insight into the offshore world of tax havens. This rather sad tale is quite suggestive of the mindset that one so often finds offshore.
“The level of conflict between these parents is shameful. They can take credit for having two lovely children but their current behaviour is making their children miserable.”
The general circumstances:
“Although the family is 100% British, its has no intention of paying tax here. The family home, a mansion bought in 2011 for £5.5 million, is in the name of a company registered in the British Virgin Islands. Ms Ingledew [a court officer] described it as the most luxurious property she had visited in 20 years of professional life. The living room alone is bigger than many people’s houses yet J is anxious about bringing his friends there because most of the rooms are unfurnished.”
The father, who has throughout his life worked in finance and property, has been failing to make payments to the family that he’s required to do – yet he’s clearly very wealthy and well connected.
“This is a man who was as recently as June 2013 given an unsecured loan of $1 million by a billionaire friend. . . .I note that in 2009 a most improper threatening letter was written on the father’s behalf by the private office of a member of the Abu Dhabi royal family in the context of the litigation with the mother’s brother. . . Despite his almost total default in meeting his financial obligations in 2015, the father, who has an empty property in Kent, stayed in a five-star hotel on Park Lane for four nights in May with his girlfriend and for six nights in the week of this hearing.”
Perhaps more to the point, for TJN’s purposes:
“The father . . . is a man of some intelligence who worked his way into money. He inhabits an offshore wheeler-dealer world in which large sums of money flow between friends and business connections, with trusts and companies being set up with a view to maximising profit, minimising tax and obscuring ownership. It is in some ways a pressured environment and there are highs and lows. . . . The mother and children have benefited from the father’s business activities, at least from the financial perspective, but his chosen lifestyle is not calm or predictable. Apparently it does not even allow him to live in the same country as his children.”
The father is not alone, of course: the offshore world is suffused with extremists who would rather lose access to their children than pay any tax. Remember this, from 2010?
“Guy Hands, the U.K. investor whose fund bought the Beatles record label, says he hasn’t visited his wife and two school-age children at their home in Kent, where he was born near London, since April.
The founder of Terra Firma Capital Partners Ltd. never flies through London airports and has missed industry awards in the U.K. capital since moving to Guernsey in the Channel Islands to reduce taxes, according to court filings. He doesn’t see his parents or his doctors in London anymore.
The decision to become a tax exile has proven a “burdensome option for me and my family,” Hands said.”
John Christensen, TJN’s director, was Jersey’s Economic Adviser and as such would interview wealthy immigrants seeking to come in under a cushy tax and residency arrangement known as 1.1(k.) He adds:
“I met people like this: they were extremists, and they ruined the lives of people around them with pathological, anti-social behaviour. They were almost indifferent to their families’ suffering. These are the extreme cases: others were less severe. One thing I noticed was that people who moved to Jersey as wealthy immigrants under Regulation 1.1(k), mainly to try and get out of UK capital gains taxes, often found that their wives and families didn’t want to move: they would be cut off from their friends and families — but the husbands were happy swanning around with their yachts and their money.
I used to ask the 1.1(k)s ‘have you discussed this with your families and your children? They would often say ‘no, I’ll discuss it with them once this is clarified.”
All this is a truly sad tale, and we weren’t entirely sure whether or not to write about it. But they are anonymous, and we thought it might add just a little additional insight into the human aspect of the anti-tax, often anti-social world of secrecy jurisdictions.