THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Privacy & Prosperity in the Offshore World
Friday, December 3, 2004 - Vol. 6 No. 233
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In This Issue:
* COMMENT: London's Crock of Gold.
* OFFSHORE: Isle of Man Scandals. Swiss Assurances. Do Canadians Hate Americans? Tony Soprano Phones Costa Rica.
* WEALTH: Weak Dollar Threatens America.
* PRIVACY & RIGHTS: The Failed War on Drugs.
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COMMENT: London's Crock of Gold.
Dear A-Letter Reader:
By any measure of current celebrity, Mohamed Al-Fayed is a celebrity.
Son of poor Egyptian parents, he arrived in the UK in the 1970s, by then a very, very rich man, barely concealing his desire to be accepted into the British Establishment. He donated donate millions of pounds to UK charities and took control of Harrods, the London department store which was once a by-word for Britishness itself. (You may recall that Mr.al- Fayed's son, Dodi, died in a Paris auto crash along with his son's reputed lover, Princess Diana.)
But not long ago Mr. al-F, unhappy with his UK residence, moved to Switzerland, which does tax foreigners a bit. This week Mr al-F said his new home is to be in tax-free MONACO. Smart move.
What allowed Mr. al-F to enjoy life in the UK for 30 years was a major and very attractive loophole in British tax law. It allows foreigners with 'substantial ties' to another nation to live in the UK free of taxes on their offshore earnings. Nearly 2 million foreigners live there and an estimated 60,000 of the wealthiest escape the terribly high income and other taxes that Tony Blair's Labour government imposes on most of its regimented citizens.
Even though the UK is one of the loudest screamers against what the OECD calls 'unfair tax competition' one never hears the UK government admit that it is one of the leading tax havens of the world - at least for rich resident foreigners. (The US is the other leading tax haven, but also, only for non-US foreigners who invest in America and finance the US trillions in national debt and trade deficits).
For years the Labour Party has run on a vague promise to abolish this rich foreigner loophole. In 2002 the rules on non-domicile tax status returned to the media spotlight after it was revealed that Indian born billionaire, Lakshmi Mittal, a steel baron who donated millions to the Labour party, had benefited from the loophole.
Every year since, UK Chancellor of the Exchequer, Gordon Brown, has threatened to close the loophole, after several time-wasting studies of the subject. And every year in his budget, Brown has left the loophole wide open -- and kept on studying. Yesterday, in his pre- budget message, he did it again. (Fine with me). "This could well turn out to be an illusory crock of gold," says John Battersby, head of tax policy strategy at KPMG. "If the rules are changed my feeling is that many of these internationally mobile individuals will leave the UK."
And with them will go billions in expenditures in the UK. Indeed taxes do have consequences, enough to make Labour annually forget its campaign promises -- if not its campaign donations.
That the way that it looks from here.
BOB BAUMAN, Editor
PS: Find out more about the UK and other offshore tax breaks in my book, Where to Stash Your Cash Legally: Offshore Tax Havens of the World.
LINK: http://www.agora-inc.com/reports/190STHOW/W190EC01/
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* COMMENT LINKS:
* Brown clamps down on tax dodges, but not tax domicile.
LINK: http://news.bbc.co.uk/1/hi/business/4062439.stm
* Pre-Budget Report, Dec 2004, the Chancellor of the Exchequer. LINK:
http://news.bbc.co.uk/nol/shared/bsp/hi/pdfs/02_12_04_pbr04_maindoc1.76.pdf
* UK tax avoidance disclosures begin to bite.
LINK: http://www.managementconsultancy.co.uk/News/1138848
* Mohamed Al-Fayed's Riviera refuge in Monaco. LINK:
http://news.ft.com/cms/s/2b985d36-4407-11d9-af06-00000e2511c8.html
* Web page of Mohamed Al-Fayed. LINK: http://www.alfayed.com/default.asp
============================================* FROM THE EDITOR'S DESK:
* OFFSHORE:
* ISLE OF MAN SIGNS ON THE LINE
DOUGLAS: On the same day that the Manx Treasury Minister, Alan Bell, signed the EU tax savings agreement, the Chief Minister resigned in a scandal, after being arrested along with his wife on unspecified charges. The two events are unrelated, but they both could be call scandalous, depending on one's viewpoint. The Isle of Man will not sacrifice its financial privacy; rather, along with EU co-members Austria, Belgium and Luxembourg, it will collect taxes on EU residents who invest in the Isle of Man. But something fundamental has changed, for the worse, some would say.
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* SWISS SENATE VOTES FOR EU TAX DIRECTIVE
BERN: 38 members of the Senate, the chamber that represents Swiss cantons, voted in favour of the EU bilateral accords, with 3 against and 3 abstentions. The senators made a major point of saying that Swiss bank secrecy has not been compromised by the EU tax directive agreement, to which Switzerland, as a non-EU member, agreed. A national vote on the EU tax deal may be forced next year by the conservative Swiss People's Party which oppose it. Good luck!
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* DO CANADIANS HATE AMERICANS?
OTTAWA: A self-described left-leaning US expatriate, after 4 years in Canada, has had enough of Canadian anti-Americanism and thoughtless prejudice. The anti-U.S. fervour saddens this American, who says life as a US expat in Canada is difficult, even painful, with almost daily confrontations with powerful anti-Americanism, says Nora Jacobson
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TONY SOPRANO PHONES COSTA RICA.
NEWARK, NEW JERSEY U.S.A. 43 people charged with guns, drugs and $1m in illicit cash plus offshore phone links to a betting room in COSTA RICA. Mafia allegedly involved. Offshore betting is illegal in the US, even if you use the Internet. But folks always will find a way.
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* WEALTH:
* WEAK DOLLAR THREATENS AMERICA.
An excellent article posted at Nationalreview.com exposes the foolish thinking of those who want to debase America's currency. Inflation is always a terrible idea and that's what lies ahead. (See LINK below).
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* PRIVACY & RIGHTS:
* WHEN WILL WE ADMIT THE DRUG 'WAR' HAS FAILED?
Despite all of the money the US has spent, all the people imprisoned, despite the damage done to US cities and the integrity of our criminal justice system, despite the restrictions on our civil liberties, despite the innocent lives lost and the needless suffering imposed on the sick and their doctors - despite all of this - the US drug trade isn't just thriving, it's growing. Illicit drugs are cheaper, more abundant, and of purer concentration than ever before. The Cato Institute explains why. See LINK below.
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* OFFSHORE LINKS:
* Isle of Man signs on the EU line.
LINK: http://www.newsmann.com/updocs/Bellsignsonline.jpg
* Isle of Man's chief minister quits. LINK:
http://www.reuters.co.uk/newsPackageArticle.jhtml?type=topNews&storyID=631812§ion=news
* Swiss Senators say "yes" to EU Bilaterals II. LINKS:
http://www.swissinfo.org/sen/swissinfo.html?siteSect=106&sid=5379064
http://www.swissinfo.org/sen/swissinfo.html?siteSect=107&sid=5373242
* Why do Canadians hate American? LINK:
http://www.washingtonpost.com/wp-dyn/articles/A15638-2004Nov26.html
* Dozens arrested as authorities break up sports betting ring. LINK:
http://www.newsday.com/news/local/state/ny-bc-nj--sportsbettingring1201dec01,0,2939064.story
* WEALTH LINK:
* Weak dollar threatens America. National Review. LINK:
http://www.nationalreview.com/nrof_comment/darda200412010816.asp
* PRIVACY & RIGHTS LINK:
* The Drug War Toll Mounts. Cato Institute.
LINK: http://www.cato.org/dailys/12-02-04.html
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LINK: http://www.agora-inc.com/reports/SVS/WSVSECFF/
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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER.
* Bob Bauman, Editor * Daniel Aponte, Jr. Editorial Asst.
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