Oliver Bullough of the Guardian writes about the recent economic decline of the Island of Jersey since the financial crises of 2008-2009. The small island is struggling to pay down its debt and attract investment as British businesses and millionaires seek other opportunities to avoid British tax laws. The article begins as follows:
As you approach Jersey by air, your plane’s shadow touches cliffs rising from the English Channel, then patchwork fields with wooded dingles between them, then four‑square buildings with groomed lawns. Down below, the island is lush and verdant, set in a sparkling procession of eastward-marching waves. It looks like a bit of Devon that ran away to sea and did rather well for itself.
John Christensen grew up in one of those handsome houses, a Norman manor surrounded by fields. “It was heaven,” he said. “There were fantastic beaches, a strong sense of fun, because of the tourism industry. The Beatles played at Springfield in 1963, stuff like that. It was cool.”
Christensen, who was born in 1956, is almost exactly the same age as Jersey’s offshore finance industry. While he was playing with his brothers in the grand rooms of the family home, Jersey lawyers were spotting one of the most profitable loopholes in history.
At that time, the world severely restricted the movement of money. Politicians blamed financial speculators for the Great Depression of the 1930s, and had imposed capital controls to prevent something similar happening again. Pounds were trapped in Britain, where taxes were high. If a person died wealthy, their heirs had to give 80% of any inheritance over £1m to the government.
To read the entire article, click here.
Posted by Logan Davis, Associate Editor, Wealth Strategies Journal.