The saga regarding withholding tax or disclosing client information from offshore jurisdictions to the UK is back in the spotlight again.
Both the Channel Islands and the Isle of Man have opted for withholding tax, rather than having to provide information on their customers. Apparently, the UK government was not happy with the decision. However, there could be some reversals of decision in the pipeline.
According to a representative of Jersey Finance, the decisions all hinge on how Switzerland decides. Because Switzerland is not part of the EU it does not have to comply with the withholding tax or information rules. However, the feeling is that if it does opt for a withholding tax, Austria, Belgium and Luxembourg will also change their minds and opt for withholding tax.
Our View
Even if these 3 States go for withholding tax, 12 out of the 15 EU countries will have opted for exchange of information, which is really what the UK government wants. Once the measures are implemented, people with savings offshore will need to carefully review their position. Basically, if you have nothing to hide, why should you pay withholding tax?
For more stories on this subject, search the archive on offshore.