Monday 22nd April 2019
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Comsure operates in:the UK, Jersey, Guernsey

Jersey trust exposed in a UK tax avoidance scheme – what will Jersey’s response be

As highlighted earlier by Comsure

https://www.comsuregroup.com/jersey-trust-named-in-non-disclosed-dotas-scheme-during-hmrc-victory-against-tax-avoidance-promoters/

HMRC won £40 million battle against tax avoidance promoters – HM Revenue and Customs has won a legal case over tax avoidance scheme promoter Hyrax Resourcing Ltd, which will help the tax authority collect over £40 million in unpaid taxes.

Unfortunately, the scheme relied on an offshore trust in Jersey. 

In consideration of the above revelations, many are now watching and waiting to see what Jersey’s response to this matter will be, particularly after what was said in 2012 about stamping out this type of behaviour

Jersey government and JFSC  position on DOTAS

As a reminder on 21 June 2012, the Chief Minister, Senator Ian Gorst, issued a statement clarifying that Jersey has no wish, or need, to engage with those who seek to involve the Island in aggressive tax planning schemes to avoid UK tax. Today, Senator Gorst and the Treasury Minister, Senator Philip Ozouf, have jointly issued the following statement: https://www.gov.je/News/2014/Pages/AbusiveTaxStatement.aspx

One particular comment stands out

  • We (Jersey Gov) are pleased the JFSC will monitor this as part of its assessment of service providers’ compliance with the regulatory requirement to organise and control their affairs effectively and to maintain adequate risk management systems.

Other KEY EXTRACTS of Jersey Gov statement

In parallel with the work the UK has been undertaking, we (Jersey Gov) have been working with industry and the Jersey Financial Services Commission (JFSC) to put in place a package of measures that will embed and reinforce the policy position that Jersey does not welcome abusive tax planning structures. These measures will also provide a framework allowing action to be taken by Government under Jersey’s business licensing regime against those who use the jurisdiction to facilitate abusive tax schemes targeted at UK residents.

“With effect from 1st of October 2014, we (Jersey Gov) expect service providers to ensure that they identify if any new business they take on will facilitate the use by their client of a tax avoidance scheme registered under DOTAS, or are of the view that they are involved in a transaction which forms part of a scheme which has a DOTAS reference number, and document this accordingly (including confirmation of compliance with DOTAS reporting requirements) as part of their business take-on procedures.

We (Jersey Gov) are pleased the JFSC will monitor this as part of its assessment of service providers’ compliance with the regulatory requirement to organise and control their affairs effectively and to maintain adequate risk management systems.

Jersey Finance will also be consulting members in relation to a proposed issuance of guidance notes expanding on the principles advocated here in relation to abusive tax schemes and we (Jersey Gov) encourage all members to engage with this.

To assist in the effective implementation of these actions we (Jersey Gov) have been working with HMRC to ensure providers do not contravene HMRC’s DOTAS rules and to consider what information would be of assistance in identifying and responding to abusive tax planning schemes with which Jersey may have some involvement. Jersey will work closely with HMRC going forward to identify ways in which we (Jersey Gov) can better collaborate with them on tax information exchange on complex international tax avoidance and structures.

We (Jersey Gov) are pleased the JFSC will monitor this as part of its assessment of service providers’ compliance with the regulatory requirement to organise and control their affairs effectively and to maintain adequate risk management systems.

Jersey Gov – https://www.gov.je/News/2014/Pages/AbusiveTaxStatement.aspx

UK HMRC – https://www.gov.uk/guidance/disclosure-of-tax-avoidance-schemes-overview


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