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Is there any point in so called tax havens anymore?

March 14, 2019

When you think of a tax haven it could be Andorra, or Switzerland or the Channel Islands or perhaps the Cayman islands? We could go on the list is endless or is it? It is important to realise that the days of banking secrecy and opaque dealings are fast drawing to a close as a whole raft of intergovernmental agreements following on from the introduction of FATCA seek to put an end to non- disclosure once and for all.

There is no point in anyone keeping their money in a Swiss bank account, for example, if the intention is to hide it from their home country’s tax officials. We are sure you will agree that the world has changed. Tax evasion became tax avoidance and very quickly turned into tax mitigation. Governments around the world have declared war and are out to try and recover as much lost tax revenue as they can.

We saw it here in Spain first with Modelo 720 which is a requirement to disclose financial assets held offshore. Many felt that this was an intrusion into their private affairs (since when has a tax authority worried about intrusion?) and simply never bothered to file a return despite the fact that the authorities could levy penalties and fines up to 150% of the value of the undisclosed assets. More recently we have had a spate of inter-governmental agreements which will mean exchange of information will be automatic and the recently enacted FATCA legislation now promises to deliver a new global standard for exchange of information.

Now anyone with an offshore account, trust or company arrangement, in a so called tax haven, needs to consider whether this has any real value or not. Of course there may be legitimate and very specific reasons why money is held in this way but in many cases there could well be better value in using a tried and tested tax mitigation strategy.

The important thing to realise is that the “good old days” will never return. Countries which have developed a thriving industry based on minimal disclosure rules have repositioned themselves in the light of all this recent legislation and now want to be at the forefront of a transparent regime.

For clients who feel at a loss as to what to do for their pensions and investments there is good news. Whilst we cannot do anything about the past our certified financial planners can review your situation and provide you with solutions based on proper tax mitigation strategies that do not require a “cloak and dagger” approach. You see there are legitimate ways you can protect your investment assets from excessive taxation be that income tax or inheritance or succession taxes. Now wouldn’t you like a discussion with one of our experts to find out how these strategies can benefit you moving forward?

For a meeting to discuss your requirements in detail with one of our financial planning experts please call us on 900 102 374 or email enquiries@fiduciarywealth.gi.

Fiduciary Wealth, the leading provider of tax planning and wealth management advice to expatriates in Spain. Call 900 102 374 or visit our website www.fiduciarywealth.gi to see the full range of services we offer.