Tax haven’s days over?

Press, 9 February 1978, Page 7

Tax haven’s days over?

NZPA staff correspondent London

The days of the Channel Islands as a tax haven for wealthy Britons may soon be over.

The organisation sub-com-mittee of the ruling Labour Party has decided to send two Labour Members of Parliament on a fact-finding i mission to Jersey, Guernsey, I Alderney, and Sark to I recommend the best method ]of ending the islands’ lowtax status.

The committee was told that as much as 100 M

(SNZIB9M) might be lost to | the mainland tax gatherers 1 each year because of the 20 ' per cent income tax which i attracted the very wealthy. The islands are within the : British currency zone even though they have their own]Government and tax system.' On top of this, residents of|i the islands have British citi-j zenship and nationality, but] do not count as British resi-, dents for tax purposes. Private capital can be moved freely between main-;' 'land Britain and the islands] without the restrictions ap-r plying to currency dealings (with the rest of the world. •

But the problem will not be easily solved. The "Guardian” newspaper reported that it might be constitutionally impossible to simply integrate the islands with the British tax system ] — and the alternative of ' treating the islands as a for- ! eign country for exchange i control as well as tax, could ] end up costing more than •the present loss. The islands nestle in the Gulf of St Malo, much (closer to France than to i England. Their attachment, to | the British Crown dates back to the Norman Conquest of 1066.