Dateline: Wroclaw, Poland
For years, Americans have had all the fun. The US government has been the most aggressive, bar none, in going after tax evaders who put money in offshore bank accounts. And in the process, they’ve created laws like FATCA to make it harder to citizens to bank offshore legally. They’re even responsible for three banks in Switzerland shutting their doors entirely.
Now, British depositors get to enjoy the same barium enema-level excitement when it comes to banking offshore. The UK government, taking a play from The Land of the Free’s “guilty until proven innocent” playbook, is now putting the onus of proving legality off offshore accounts onto British savers.
Basically, if you live in the UK and keep money offshore, you will now be treated as a common criminal. This should come as no surprise. The UK government has a national debt almost as substantial as the United States, to the tune of nearly US$2 billion. Debt as a share of GDP is 88%, not far behind the 100%+ ratios that exist in The Land of the Free.
More importantly, Britain is adding nearly $4 billion in debt to the credit card pile every.
The claim is that today’s “austerity” measures should eliminate the budget deficit within five years. Just like alcoholics claim they’ll stop drinking after the next shot.
As a result, the UK government now has to ramp up the crack down on British offshore account holders. Just this month, UK tax authorities have obtained details of every British client of HSBC in Jersey after a whistleblower secretly provided them with a list of names, addresses and account balances.
Her Majesty’s tax collectors told the press that “Clamping down on those who try to cheat the system through evading taxes and over claiming benefits is a top priority for us and we value the information we receive from the public and business community.”
In orders words, the ends justify the means. It’s OK for the UK government to beg, borrow, and steal (not to mention extort) its way to banking data from other jurisdictions. In the wake of this latest issue, the Treasury has unveiled plans to make it a criminal offence for Britons to hold undeclared income overseas.
Currently, the British government can only convict an accosted tax evader if it can prove that said individual was trying to hide money from the authorities for purposes of tax evasion.
However, the new laws will shift the burden of proof to accused individuals, meaning accused tax cheats must demonstrate they weren’t trying to evade taxation.
The language used by the Treasury reeks of desperation. The British government is now claiming that they will hunt down offshore bank account holders around the world, leaving them with “no safe havens”.
Those who don’t comply with the new law will face huge fines or jail time.
Now, we don’t recommend tax evasion at Nomad Capitalist. There are plenty of legal ways to diversify your assets and legally avoid taxes without resorting to illegal activities.
But the reality is these new laws in Britain will have the exact same impact on criminals as FATCA does in the United States.
Several of those discovered to have offshore accounts in Britain last week included an arms dealer and a cyber-criminal. Does anyone really think those kinds of people are going to suddenly step up and report their offshore bank accounts? Of course not.
The end result, however, will be greater difficulty for Brits in opening offshore accounts. As a result of the global offshore crackdown led by the US and the UK, banks in the European offshore hubs like the Isle of Man
have closed down. Options for British savers are already being reduced.
These new laws will only make it more difficult.
However, Britons can take consolation in one thing: Americans, who are paying their annual tithe to Uncle Sam today, are still far worse off.
That’s because the United States, unlike Britain, offers no recourse to those who were ignorant to the law. Eighty-year old ladies have been sentenced to prison in The Land of the Free, all because their late husbands left them offshore bank accounts they didn’t know they had to report.
The disturbing trend in bankrupt western countries is to continue provincial policies that ignore the reality that capital doesn’t want to live in such countries. Investment opportunities in the United States and western Europe are weak these days, yet governments don’t want to see that reality and work to make their countries more appealing for investment.
Instead, they’d rather give populist speeches and rail against “the wealthy” in order to score political points. It’s a lot easier to blame some rich guy, even if he wasn’t the one who created trillions of dollars in debt.
If you live in a bankrupt western nation, make sure you’re in full compliance with your home country’s laws before going offshore. One way to do this is to watch many of the asset protection law videos available in The Nomad Society. Sign up now and enjoy instant access to dozens of hours of actionable videos that help you not only go offshore, but stay out of an orange jumpsuit.