Cayman ready to benefit from high tax UK
(CNS): In the wake of recent comments about Cayman’s possible demise, the chair of Cayman Finance has said that Cayman’s financial services sector is robust and poised to take advantage of Britain’s and other European states’ high tax regimes. Anthony Travers said that far from “withering on the vine”, the Cayman Islands is flourishing in the current economic climate, which, he said, was understandable given that no Cayman Islands financial institution failed in the financial meltdown. With zero percent income, capital gains and corporate tax, the jurisdiction is drawing particular interest from Britons thinking of leaving the UK, Travers believes.
Speaking in the wake of less than favourable reports about Cayman in the Financial Times this week, he said the reports fly in the face of the statistics, as it was not only funds that were on the rise but company incorporations for 2010 in Cayman were also on an upward trend, with increases of over 14 % for Q1 and 24% for Q2.
Travers said that Cayman was also in the perfect position to benefit from the Capital Gains Tax increase in the UK. With CGT going up to 28 percent, an increasing number of investors were looking to move to Cayman. “We have said all along that punitive tax measures in the UK and the rest of Europe will drive individuals and companies offshore,” he stated. “Whilst we welcome this we are continually saddened that there is still a hard-line group of EU politicians who cannot grasp that low taxes stimulate economies and high taxes do exactly the opposite by creating less of everything, including very often, tax revenue. That is the basis for the success of the Cayman model.”
Travers noted that he was not the only one making these claims and pointed to remarks by Deloitte’s Lucy Hardwick who told The Sunday Times, “The increase in the CGT rate to 28% is a tipping point for many individuals. Some will be looking to relocate to another country to mitigate rates.”
Category: Business
Maybe we aught to be heavily promoting to the world that non of Cayman’s Banks and financial institutions have failed rather than sending the Premier jet-setting all over the world wasting our precious resources.
ooooh dear, do a spell check please. Your post has no weight when you have typos like those.
Re. "With CGT going up to 28 percent, an increasing number of investors were looking to move to Cayman."
Perhaps someone could give me an explanation. Does this mean that investors are interested in physically moving to Cayman (I think not) or looking to establish pieces of paper with concealed ownership in Cayman to avoid taxes while continuing to enjoy the benefits of living in a big country, e.g. fine restaurants, theatre, concerts, sports events (I think yes)?
Are fine restaurants, theatre, concerts and sports events attributes of high-tax nations or attributes of high-population nations? Being a tax haven has nothing to do with a lack of sporting events. I just want to clarify that the benefits ofliving in a "big" country is really "benefits of living in a populous country".
Your question is irrelevant to the point I was making, which was that, if you live in a country and enjoy all of its benefits, then you should meet the financial and other obligations (both moral and legal) the country places on its residents, raher than seek to avoid them.
If you are not prepared to do that, you should move somewhere else instead of leeching off others who work hard and do not seek to avoid their responsibilities.
I was not making a statement about high taxes or low taxes. That is neither here nor there, as is your point about low or high populous countries. It’s simply about people who try to have their cake and eat it too.
Can you imagine what the world would be like if everybody tried to avoid one’s responsibilities, not just financially but generally, and, in doing so, cited legal loopholes as justification?
responsibilities?
What making sure someone who can’t be bothered to work and using state funding to raise 7 kids and getting a nice hand out of GBP50, 000 of my hard earned money to do it?
Why should I be responsible for that?
Until Gov’s can provide Responsible allocation of tax payers money, I will not be bound to they’re own view of what my responsibilities should be!
http://www.telegraph.co.uk/news/newstopics/politics/3949358/Family-living-in-2.6-million-council-house.html
I detest spongers as much as anyone. However, when you live in a country, you’ve go to take the rough with the smooth.
If you don’t like the country you are living in, then either work to improve it from within or move to another country.
Personally, I would much prefer to live in a country with a social conscience and where a credible effort is made to look after less fortunate people, e.g. free health care for the poor, than in a ‘me, me, me’ jurisdiction that strives to make money at all costs, with little or no consideration for ethics and morality.
Where do you live, Mr Marchant? I and others are looking for the non "me me me" country you describe in your last paragraph and since it cannot in any way by your definition be the UK or the US, we are fascinated and want to know The Answer.
The rate of capital gains tax, at 28%, is still lower than its equivalent in many developed states. The recent increase is lower than was expected. The previous low rate of 18% was only for a couple of years and prior to that was 40%.
Anyone in Europe with serious wealth would have left in the bad old days of 40% tax . And, for the record, hardly any of them came here. Can we name any?
The more serious tax effect in the UK is the raising of the maximum band of inconme tax to 50%. This might push some to look at working elsewhere, but how many quality, career minded professionals want to move to a place where they’re going to be rolled over and sent back after a few years?
40%?, actually it was 0%, or 10% or 20%, or then 40%, depending on the size of the gain and then also the length of time the asset was held
Don’t kid yourselves. Cayman has no culture, no decent food or shopping, it very weak on local aesthetics and is extremely isolated.
It has very little to offer.
@ Really?
Now if only I could get those like you who feel the way you do, but still live here and rape and pilage the country for financial gain, to leave… then we could retrieve some of the culture we USED to have before you came and ruined it, (and we could eat what we like, rather than what you think is "good") and as long as I could be isolated FROM YOU AND YOUR TYPE, I’d be fine thank you.
I am "pillaging" with two "l"s. But you are right, I am only here for the cash. Is that chip on your shoulder hurting? It would really hurt if you knew what I was earning.
@ Really.
Keep and eye out for me. I’ll be easily identified. The chip on my shoulder is the size of the Cayman Brac Bluff.
And hurry and rape and "pillage" (sic) (see I know a little of "you’ (sic) language too). Your days are numbered as, unless someone like me stops those like you and The Dictator, you’ll have nothing to "pillage" (sic) GET IT?. In any event, we’ll find a way to return you to your incarceration (I’m "usin" (sic) "big" words so that you can really "get into the spirit" of the matter. (My aplogies; I’m trying to use the little caustic humour I learned from you).
And as usual, you earn what you do for identifying spelling errors; something someone in a foreign language country, earning less than 1% of what you do, can do with a computer. Wow; your days of being overpaid are numbered.
Whilst my orginal post wasn’t directed at you, obviously this one is as you are indicted by your own words.
The fact that Cayman doesn’t have mental hospital it woefully apparent.
Did you try and pull words off the thesaurus, because your post makes little sense. Reread your last sentence.
I do frankly find it ironic that many people said that bringing in the roll over would bring in more mercenary type workers, as the only reason for them to come is to make money to take home. Those roll over supporters all claimed it would never happen.
Then it does and they bitterly complain about it wondering why they are here.
You always will have to live with the consequences of your actions just like everyone else in the world does
Sorry if that bursts your bubble
I love the whiff of someone else’s bitterness in the morning. You worry about your insecurity, I’ll worry about my job prospects.
By the way, I am not worried in the slightest about my job prospects.
Someone is very bitter about Cayman. One wonders why anyone came at all since it is such a lousy place.
Not to be a stickler, but "recapitalize its balance sheet" means it lost all its money and needed new money to avoid being broke, so it sold shares to get money.
The report at the time said the existing shareholders were wiped out and the new shareholders effectively "bought the bank".
Mr Travers, are you out there?
Recapitalization does not mean "it lost all its money" as you have asserted. A firm can go through a recapitalization exercise at any time for a variety of reasons.
If you’d like to get a brief overview you can visit:
http://www.investopedia.com/terms/r/recapitalization.asp
or
http://www.investorwords.com/4078/recapitalization.html.
I know full well what recapitalization means generally, but we’re talking about the BANK OF BUTTERFIELD specifically here, not generalizations. I also am fully capabile of seeing when a spokesman is trying to put a spin on something to make it sound like something it’s not, especially by using fancy financial words that make regular folks think everything is fine ("It’s just a ‘recapitalization’, so everything must be fine.")
I really want to discuss BUTTERFIELD, and whether it "it lost all its money". Are you deliberately trying to drift the discussion away from BUTTERFIELD and into harmless generalities to avoid dealing with the Butterfield question, or are you just being dense while trying to show off the fact that you have access to Google?
Now: do you have a comment on the subject of whether Butterfield lost all its money, or not?
Anyone?
The answer is no. The Bank (group) lost some money due to investments going bad, as have most banks and individuals. Due to rules by the regulators, new capital was required to bring the amount back to the necessary levels. This should be fairly obvious by the amounts involved and the percentage of the shares now owned by the new investors. If there had been no investors willing to purchase shares then that may have given cause for concern. As there were obviously many in the purchasing queue they must feel very confident in the future of the organisation.
Agreed. Much interest from European families of high net worth. This comes from the horse’s mouth. Families who count their net worth in the billions. Spoken to them and discussed it in person over the previous year. In Monaco, St Tropez and in London.
I agree people may look at other places to go, but my feeling is they will stay a lot closer to home than the caribbean, if you have business interests in Europe it would be very hard to run your business 6-7 hrs behind time when they are other options closer. having done a lhr-gcm trip a lot, it really take it out of you… obviously we will have to see what happens, how many people have taken up this $1m perm res thing i heard about so far? Or moved here? I hope i am wrong, we could use some investment!
@ Voice of Reason.
I am afraid that if someone leaves their country because of money…
Can you ask them what their expectations are if they come here or at least desire our help in protecting their wealth? Will they help us with our financial challenges if we help them with theirs?
(Signed) Future member of society to deal with these questions.
Mr Travers, what about the Bank of Butterfield? Didn’t it have to sell itself to avoid its own insolvency?
(Apologies to Butterfield if this understanding is not correct.)
Butterfield undertook a transaction to recapitalize its balance sheet. It essentially sold shares which is a transaction firms do every day in the stock market.
It did not fail. Did any account holders lose money? No. Did the governemnt or liquidators have to take over the bank? Again no.
A transaction firms may do, yes, but in this case a transaction done to avoid insolvency.
By way of clarification, Butterfield Bank raised $220 million in 2009 in an offering that was underwritten by the Bermuda Government
In March, 2010, a group of foreign investors, led by US-based private equity frim Carlyle Group, injected $550 million into the bank (including $30 million from Bermuda Government Pension Funds).
Such were the consequences of failure to the local community, the Bermuda Government played a leading role in helping to rescue the bank from a perilous financial state.
I think in fariness you should point out that the 2009 offering was oversubscribed (more potential investors than shares on offer) and the Bermuda Government did not have to do anything. Then with the 2010 there was no Government involvement. This does not look like a "perilious financial state" to me since I would doubt that these savy investors would buy into such an organisation.
Re. "I think in fariness you should point out that the 2009 offering was oversubscribed (more potential investors than shares on offer) and the Bermuda Government did not have to do anything."
It is a misrepresentation to claim that the Bermuda Government ‘did not have to do anything" when, in reality, it guaranteed the 2009 offering. That is quite a big something because of the confidence it inspired in the offering.
Additionally, as I understand it, the Bermuda Monetary Authority played a significant role in assisting the bank through its financial problems (which were indeed perilous) and ensuring that it met legal capital requirements. In doing so, the BMA prevented arun on the bank, which would have bene catastrophic for the country.
Butterfield Bank was suffering massive losses and its share price had fallen precipitously to a low of $1.25 per share. Without additional capital, the consensus was the that the bank would have collapsed.
On the plus side, it is Bermuda’s oldest bank, it has an established customer base and has a good reputation, all of which made it attractive to new investors.
Thanks David. That’s the useful sort of information I was looking for!
Bank of Butterfield in Bermuda. Cayman operations did just fine and helped keept them afloat. As far as Cayman licensees are concerned he is 100% correct.
Interesting that our own Government "cannot grasp that low taxes stimulate economies and high taxes do exactly the opposite by creating less of everything, including very often, tax revenue".