1

Rebecca H

There is an error in this report in that it was actually the ADMINISTRATORS that approached Deputy Trott about the Phantom deposit scheme. This would enable a more rapid release of some funds to the Landsbanki savers, many of whom are elderly and the money would be recouped later when the assets were sold. I am disgusted how ordinary savers have been treated in this case. In both Iceland and the UK ordinary savers were not made to suffer. The Governments stepped in both instances. By opperating such a scheme it would also lesson the pressure for assets to be sold in the current econimic climate. The bank could be wound down in an orderly fashion. This is what has been done by the IOM government with Kaupthing. As interest rates are now so low, the loss of interest to the Guernsey Government is not even an issue. My only conclusion is that Mr Trott doesn’t care less about the plight of the Guernsey depositors who had trusted in the Guernsey banking system.

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3

Compose

You should be aware that in his campaigning Minister Trott tends to misrepresent issues.

The administrator knows the law regarding treating all depositors equally, and yet it was the administrator who suggested the Phantom deposit scheme.

The Guernsey regulators are guilty of allowing this bank to continue trading on the Island, when they knew that the bank was failing.

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5

Norbert

The support of Guernsey state and its reps. to the depositors is more than disgusting. My recent funds matured and I moved them away to IOM, as IOM supports depositors in a much better way, without much hesitation. The same was done by friends.
As Mr. Trott, Mr. Neville etc. do not intend to assist neither Guernsey residents nor others, the residents will hopefully show their true feeelings when they vote these people out of office as unsuiteable and the depositors have to vote with their feet and move their capital away.
It would be simple, inexpensive and courages to act for the trusting depositors, just as IOM did it. But such grains of honesty is obviously missing in these reps.

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7

Fast Robert

From the same report that Trott decided to forget to include.

“Changes in the fourth quarter banking figures, which are expressed in sterling terms, were dominated by exchange rate movements. Sterling weakened significantly against all the major trading currencies, declining 18% against the US Dollar, 17% against the Euro and 22% against the Swiss Franc. The impact of this was a large increase in the numbers reported which helped to push deposit and asset figures to record levels, when expressed in sterling. However the story in terms of underlying currencies is varied. Deposit business in US Dollars was down almost 8% and in Swiss Francs down 14% but business in Euro was up 14.5% and sterling business was up some 3%. The overall currency mix showed some changes in the proportion of deposits in individual currencies with Euros increasing significantly to 27.2% but the US Dollar proportion falling to 44.7% and the proportion of Sterling deposits also fell to 22.0%. The proportion of Swiss Franc deposits fell slightly to 3.6%. Although exchange rate factors were also present in the increase in total liabilities there was a material volume increase in other liabilities as a result of group non-capital term debt issues by one large bank. ”

So his statement is false. There was a net decrease in bank deposits, but an increase in the total sterling equivalent.

As for zero ten attracting more business – not in the banking sector. No new licenses.

Could have been a lot worse….saved by Gordon Brown’s slump on the Poond?

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9

Tony

Compose
The guarantee relied on the local bank failing and needing to be bailed out by it’s parent.Which in turn could call on the Iceland government if necessary.
What in fact happened was that the Icelandic economy as a whole collapsed, the parent company collapsed, and because of funds upstreamed Lansbanki Guernsey collapsed. The fact that this rendered the guarantee worthless had nothing to do with the regulation on island. The problem was caused by failures outside of Guernsey and beyond it’s regulation. Lansbanki Guernsey was in fact surprisingly liquid, in that it held a substantial percentage of it’s liabilities in cash. Far more so than most high street banks. It’s just that the administrators can’t get at that cash because it is tied up in other collapsed banks.

When you deposited your money in Guernsey there was no depositor protection scheme. Surely nobody forced you to deposit here? Did you check if there was a depositor protection scheme ? The States of Guernsey will I beleive not have made any guarantee thet they would safeguard your money. If you could not afford to lose any of that money then you should have deposited it in such a way that there was a government backed protection scheme to cover you fully. If you did not feel the need, or take the time, to arrange for the safety of your deposits why should I as a Guernsey taxpayer have to bail you out ?

Complaining now is somewhat similar to complaining after you suffer a fire that your insurance company won’t pay out for fire damage when you don’t have cover for it. Would you expect the States to pay for all personal uninsured losses incured in Guernsey ?

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11

Darren

Lyndon Trott has no integrity.

The statement made in this article is misleading in that the quote breaks off halfway through mid sen……. tence.

The people to blame are the banks, and not just Cheshire / Landisbanki; it is the global investment community that placed interests in hedge funds which were abstract and not commodity based – they chose to invest your money in schemes and investments which were incredibly high risk; the trading stock was based on promises and returns that were in fact fictional assurances.

So the loss is the banks faults and not just Landisbanki – look at Lehmans and other US financial institutions that have gone to the wall, not to mention UK banks that have been bailed out by the Government.

However in the UK the Government there has stepped in to help its taxpayers – in Guernsey it has not; in fact Gsy Government, which is led by Lyndon, has failed to communicate their intentions effectively – very poor communication has been employed in this situation and Lyndon’s abscence says a lot about how much he cares. I imagine if he had had a sizeable investement then the outcome and his interaction would have been quite different.

Lyndon has little respect in the UK – to be frank, he runs a storm in a teacup; there is an excess of ‘Government’ personnel running the show here and it could be run with half the ‘leaders’ or what I heard this week was Guernsey parliament! – Gordon Brown wouldn’t think he could wash his car, never mind offer an intelligent debate over the recovery of funds for Guernsey residents who invested in Landisbanki.

While Lyndon is not responsible for the loss, he has failed to represent effectively Gsy taxpayers in recovering their funds – he does not have to delve into the ever dwindling reserves (which will expire next year) however he should have campaigned effectively using an integrated communications plan using media to support his argument – not flying to China for some bloody hopeless cause.

Lyndon – time to go old bean. Lets appoint someone who cares about Guernsey.

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13

David

Daniel Herzberg and Lucy Kinnison
Please elaborate on what tax has been paid to Guernsey on your bank interest.
Interest is only taxable in Guernsey if the recipient is resident in Guernsey. Interest paid to non-residents is not taxable in Guernsey.
The only taxes payable on interest earned in Guernsey by non-residents is if the recipient lives in the EU and has opted to suffer 20% withholding tax under the EUSTD instead of allowing their interest amounts and details to be reported back to their home country. Guernsey retains one-third of that withholding tax as a collection cost. But why would anybody opt for withholding tax unless they weren’t intending to declare their income in their home country, which is of course a criminal offence!
I would therefore like to know what Guernsey taxes you think you have been paying if you are not resident here. In light of your comments this is important.

Tony
Your comments are absolutely spot on. Very well said.

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15

Stephen John

Tony

Your comment “The fact that this rendered the guarantee worthless had nothing to do with the regulation on island” requires a response.

The real fact is that regardelss of what was going on in the world economy, the parental guarantee and letter of comfort was legally worthless. The GFSC said so in August 2008.

It can be asked why didn’t the GFSC take steps to ensure the guarantees were written in such a manner as to be be legally binding.

Now, I acept that would npt have been of much comfoort for LG depositors, but I venture to suggest most of the deposit takers in Guernsey still have the not legally binding guarantees.

Looking at the question of depositor protection, just remember Guernsey (and its residents) still has no protection and relies on the UK, to support its residents when things go wrong.

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17

muzeek

Tony
Great comment, you’ve made the situation very clear.

Perhaps now, Landsbanki depositors will stop slagging off Guernsey and put their efforts to getting the cash available to them sitting in the UK.

I will also remind those who keep on about it, a parental bank guarantee is worthless if the parent bank is insolvent.

Finally, Mr Trott please ignore the Landsbanki bully boys.

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19

P W

Hi Muzeek.

You may not be aware, but I stated off the Action Group here in Jersey.

I spent the first 2 Months taking calls off a number of individuals who in my opinion were on the verge of suicide. Theses were not bully boys but ordinary working people, many pensioners who had their life savings tied up. Many of the Guernsey folk had no real choice when Landsbanki took over Cheshire Guernsey.

So please Mate, cut out the Crap, this doesn’t bother me but it will I am sure upset the many Pensioners on your Island who are being let down by the very people they voted into power. please take a look below as one example.

True Story

The fruit of many years of hard graft has disappeared.

My wife and I, having been born in Guernsey, with grandparents who worked in the growing industry, were certainly not born with silver spoons in our mouths, but through no fault of our own have unfortunately been caught up in the Landsbanki fiasco.

Having suffered five miserable years in England during the war as evacuees we returned home to resume a relatively normal childhood. After school I joined the growing industry, as did many others. After a few years experience I decided to start on my own with 400ft of glass as a rental. Work was long and hard, and everything was done manually. We progressed to owning a property, and over the years placed most of our profits into the business – expanding, modernising, rebuilding – always working on overdraft as no money came in from November to April. Working with an overdraft meant there was very rarely any spare cash – until retirement! Hey presto – no more overdraft! – and we also managed to sell our glasshouse property – albeit for peanuts – so we had cash to spare to invest for our pension.

A safe British Building Society was secure, and when Landsbanki took over at the time they were rated okay, so there was no cause for alarm. Then came the crash, and at the moment the fruit of many years of hard graft from both my wife and me has disappeared. We don’t expect tax money from Guernsey folk, but we do expect support from our Government and Deputies in righting this injustice and helping us to get our stolen cash back.

Am I angry at the moment? You bet I am – how would you feel?

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21

muzeek

David
Very good comment concerning tax implications on funds deposited in the island.

I have always had my suspicions that many of these Landsbanki depositors living abroad, use Guernsey for tax purposes.

I have asked several times why they use Guernsey rather than deposit in the country they reside in, but I have never got an answer.

From your explanation I now know why.

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23

Daniel Herzberg

Tony – Regarding your comment about – insurance companies – If my insurance company had been authorized by a governing body that had allowed them to issue to me, in writing, a Guarantee that stated that ‘my house is safe’ and then they didn’t pay me for damage to my house I would have a very strong case against the governing body for allowing false advertising.

Muzeek – Landsbanki parent bank is not insolvent, it is still in operation in Iceland

David – please read the ‘Tax-News’ Website regarding withholding tax -(http://www.tax-news.com/archive/story/Guernsey_To_Adopt_Withholding_Tax_Under_EU_Directive_xxxx11451.html)

‘Guernsey will retain 25% of the retention tax revenue and transfer 75% of the revenue to the EU Member State of residence of the beneficial owner of the interest.’

With all of this ‘misrepresentation’ about the ‘facts’ going on in Guernsey, I think it would be much healthier if the principal industry of the island returned to growing tomatoes – a tomato is red and is a fruit (or is it a vegetable I hear the Guernsey folk say).

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25

Eric Graham

I would wish to bring to the attention of the general public that Deputy Trotts accusation of the action group misrepresenting issues is exactly the opposite.
The flier we handed out to States Deputies on the 25th February made no reference to the GFSC figures as they were not published until the following day, the 26th February(see GFSC website).
Please check out these details yourself and then decide who it is that is misrepresenting issues.

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27

David

Daniel

I am very aware of the provisions of the EUSTD.

The 20% withholding tax (previously 15%)is only applied in cases where the accountholder opts for withholding tax instead of exchange of information. Yes, Guernsey retains a percentage of the tax withhheld. But why would you (or indeed anybody else ?) have opted for withholding tax unless you were not intending to pay your full taxes in your country of residence ? If you were willing to exchange information then you wouldn’t pay any Guernsey tax at all and your sole tax liability would be in your home country.

If you were opting for withholding tax then does that mean that you were illegally evading tax in your home country ? It rather suggests that you were. By the way, if that’s the case then you would have been committing a criminal act of tax evasion and so are on very dodgy ground indeed.

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29

russM

It has been said that there is no appetite to compensate Landsbanki investors from taxpayers funds and the majority of people seem to agree with this (obviously not the Landsbanki investors). My concern for investors who lost their money disappeared early on when Landsbanki investors representatives attacked Guernsey publicly and stated how they wished to destroy the Island as a finance centre. These attacks were before any discussions were held and I believe they turned people against the investors. The tactics of the representatives have been very poor – attack the people you want to help you before having any discussions with them – and consequently there is not as much public sympathy for investors as there might have been with a different approach. Quiet negotiation behind the scenes may have had a different result instead of slagging Guernsey off from the start.

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31

Daniel

David – you say in your comment that:

‘If you were opting for withholding tax then does that mean that you were illegally evading tax in your home country ? It rather suggests that you were. By the way, if that’s the case then you would have been committing a criminal act of tax evasion and so are on very dodgy ground indeed.’

The fact of the matter is that I was following the written advice given by Landsbanki bank that was regulated and authorized by the GFSC.

So I take it from your assumption that the GFSC is actively promoting ‘criminal acts of tax evasion’.

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33

Pauline

I am a Canadian and British Citizen who had money in Cheshire Guernsey and subsequently Landsbanki. I am tired of seeing my savings called an “investment”. It was a savings account with only slightly more interest than other institutions, however as I am a person with a low risk tolerance when it comes to finances I did my best to get the most I could. I think that is normal and pretty human. That doesn’t mean that I was greedy and it serves me right to lose my money. It was NOT an investment, NOT the stock market it was a SAVINGS account. It was supposed to be safe and regulated by Guernsey. People who have not been affected by this financial disaster should take 30 seconds to try and imagine what it feels like to lose your life savings. It makes you sick – mentally and physically. It makes you depressed. It makes you feel suicidal quite simply because a feeling of helplessness overcomes everything.

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35

Stephen John

David said March 2 at 1.24pm

“If you were opting for withholding tax then does that mean that you were illegally evading tax in your home country ? It rather suggests that you were. By the way, if that’s the case then you would have been committing a criminal act of tax evasion and so are on very dodgy ground indeed”

David, If a depositor is suspected of illegally evading tax does this mean the bank has a duty to report this suspicion?

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37

Muzeek

russM
Excellent comment, brief and to the point.

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39

Janson

Russ; it was the lack of action by our ‘lords and masters’ and the treasury minister’s statement right at the outset that as the States did not have any money in LG and no one at the top had money in it any longer, it wasn’t their problem. That wound people up. While the IoM was knocking on the door of Iceland and approaching the scandal in a proactive way, our’s were running the other way. We had the assurance that they were doing a lot behind the scenes. We had to physically meet with the Ministry of Justice and Treasury to find out they were doing next to nothing. Without push from them we were likely to get nowhere. So the reaction is understandable. I do not want to see this Island go down, but if it does it will not be because of LG savers but the lack of action by government. I for one would be happy if they showed some metal rather that the halfway solutions so far proposed. because we were retail savers and small fry they dismiss us discourteously. Our approach in Guernsey has been reasoned and dignified. Instead of a reciprical respect we have experienced spin at it lowest level. So Russ where would you go if you were in the desparate straights of a large number of pensioners, many infirm? So now those off island have no faith or respect for our government and they see the only way forward is to force the issue. To that end a consensus is building to lobby the G20 leaders to shut down the institutional investors that use Guernsey as a ‘tax haven’. If they are successful then God help Guernsey. See you on the next boat!

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41

smith

Janson – lobbying the G20 seems to me to be both vindictive and cutting off your nose to spite your face. If you attack the livelihood of the Island then do not expect any sympathy from its inhabitants.
Daniel – can you pls direct me to those statements in the email you received from the Managing Director which were factually inaccurate. I appreciate that the intent was to give you comfort and that comfort was ultimately misplaced but what you and others seem to grasp was that the ultimate cause was beyond the control of the Managing Director or even the GFSC – if you want to blame anyone then blame Gordon Brown.

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43

M J Ashbey

Mr (or Ms?) Smith

You said “Janson the GFSC did not screw up any more than the FSA did. Banks go bust. It happens…. You are flogging a dead horse here. You have peoples’ sympathy but will rapidly lose it if you continue to sprout nonsense”.

I do not consider Janson’s comments to be nonsense. Quite the contrary. Yes, banks do go bust; you are right. But the BIG BIG, in fact HUGE difference is that savers in the UK, the Isle of Man, the Netherlands etc etc can rest assured that their respective Governments will help them out.

The Government of Guernsey is conspicuous in the world by reaping vast amounts of revenue from its international finance centre during the fat years – but then refusing to assist savers when there is a crisis.

They cannot seem to understand that, in the long run, their finance centre will suffer irreparable damage to its reputation.

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45

David

Stephen John
Yes – opting for withholding tax must be reasonable grounds for suspecting that the depositor is not going to be declaring the interest earned in his own country of residence.

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47

The Man

MJ Ashby,

Cracking point well made.

Guernsey has reaped the benefits of its offshore banking sector for decades, yet the first sign of trouble it firstly goes running in the opposite direction and then when cornered comes out swinging accusing the action group (which lets not forget is a front for a lot of innocent people who’s lives have been destroyed) of misrepresenting facts.

I dont want to get into a “should they or shouldnt they act” debate, but the simple fact of the matter that Guernsey is the only jurisdiction to not even attempt to help its investors says it all really.

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49

David

Jackie
The guarantee was in respect of the return to be generated from the original investment. It wasn’t in respect of the investment itself. No such guarantee of 100% of a bank’s liabilities existed then or now. Even a depositor’s protection scheme doesn’t guarantee 100% of the capital. If you think otherwise then you too don’t understand what a bank deposit actually constitutes.

Ultimately, all banks are credit-rated by rating agencies. Now, we know that these ratings may be questionable, but think about why they are actually issued. If all bank deposits were 100% guaranteed, why would they be necessary ? Who exactly do you think is guaranteeing each bank’s deposits ? If every bank was 100% safe then every bank deposit would carry the same risk. So why wouldn’t all banks be offering the same deposit rate ? Everyone would simply always go to the bank offering the best interest rate because there would be no downside capital risk whatsoever. That is totally unrealistic and there is no such thing as a free lunch. 7% at Landsbanki versus 4.75% at the same time at HSBC. Why ? Isn’t it obvious ?

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51

Stephen John

David,

If a depositor is suspected of illegally evading tax does this mean the bank has a duty to report this suspicion?

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53

Jackie

>>Why ? Isn’t it obvious ?<<

You are making the same mistake again David. A Bank account or bank deposit is not, to the common woman or man an investment. It’s a ‘bank’ (safe house) with an ‘account’ (depositor named as owner) with a ‘guaranteed return’ (you work out what tthat means ‘fixed for a year’ (depositor can draw out at the end)

Nowhere in any of the advertised literature was there a caveat along the lines of ‘shares can go up as well as down’ or similiarly in LGs case it should have been ‘our parent country has been bankrupt for 6 months before we got here so take up our offer at your peril’

Many of these deposits were by human beings, and there have been human consequences. Not professional investors playing with spare cash in high risk equities.

I can’t draw pictures for you.

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55

J G

Jersey born daughter, now living in UK, life savings as a result of hours of hard slog in anticipation of buying her own home.
Tell me why she should have any qualms about bringing down the reputation of the Island that has failed all depositors so miserably. Loyalty is a two way thing.
Rest assured Mr Trott, she is now pulling out all stops to discredit you. Landsbanki DEPOSITORS will not be going away!

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57

Muzeek

Gary Blanchard states

“I have paid taxes in Guernsey for 50 years and I believe the States have a moral obligation to sort out some sort of assistance to depositors in the short term and reclaim those assets from the Administrators in the longer term.”

Now, due to circumstances last year was the first time in my life I had funds to deposit where I wanted them to work for me, but at the same time had no knowledge at all about finance and savings.

I did a little homework and saw that Landsbanki were offering over
7 % on savings, which was much higher than what I was getting with my bank.

I discussed this with my bank where I was getting 5% and the advise I was given that any bank giving over 7 % on savings were desperate for cash.

This sounded like warning bells to me and hence I played safe and left my funds at a lower rate.

Now why didn’t Landsbanki savers, more knowledgeable than me heed the signs, of higher rate = higher risk.

I also have paid taxes in Guernsey for over 50 years, and because I used common sense and went for safety rather than greed, I certainly don’t want my taxes used in this way.

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59

REAL WORLD.

I am a UK tax payer so why is ok for my taxes to be used to bail out your banks Northern Rock and not for your government or your tax payers to compensate me when a bank fails in your jurisdiction, I have had enough comments from people saying we will not use taxpayers money, well actually it will not be tax payers money that will be used. I don’t see you CM doing anything good for the Island anyway, Remove the plank of wood from your own eyes before you attempt to remove the speck of sawdust from mine.
What do I have to lose to bring the reputation of GUERNSEY down. NADA, NOTHING becuase I have already lost.

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61

smith

Springbok – I suspect you will find it is not so much a storm but more a barely noticed squall.

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63

Devils Advocate

If there had been a protection scheme in place I would assume that the value may have been the £35k as in the UK prior to the uplift.

Many depositors have already received over £35k and so I guess those shouting the loudest are those who had deposits of less than £117k, which would mean:-

£10k recvd.30% = £3k o/s bal £7k
£50k recvd. 30% = £15k o/s bal £20k
£100k recvd. 30% = £30k o/s bal £5k
£117k recvd. 30% = £35k o/s nil.
£150k recvd. 30% = £45k o/s nil. better off by £10k than if they had relied upon a protection scheme.

At the worst lets say the Guernsey tax payers were given a vote on whether to offer to pay depositors the balance between what they have already received and £35k, how would they vote!! Not forgetting Deputy Trott etc.. have the whole of the Guernsey public to answer to.

How many depositors? How much would it cost? Would the Guernsey public prefer to make a limited compensation say for example £25m and forget building a new school or suffer higher direct and indirect taxes?

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65

David

Jackie
You don’t need to draw a picture. I fully understand what you are saying. But you are wrong. Factually wrong. If you thought you had a 100% guaranteed protection of your capital then you did not and still do not understand what a bank deposit actually is.

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67

Springbok

SMITH
All I would say to you is ‘WATCH THIS SPACE’
not a SQUALL but a full on GALE.

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69

M J Ashbey

Bottom line is that UK – NOT Guernsey – taxpayers bailed out the Guernsey branches of Northern Rock, RBS, Lloyds HBOS etc.

Guernsey has reaped MASSIVE revenue from its intl finance centre in recent years.

Now that world markets go pear-shaped, the UK, Isle of Man, Netherlands etc etc all rush to help stricken savers in branches of Icelandic banks in their respective territories.

None of them have a specific mandate or wait to ascertain whether or not their politicians have the “appetite” to assist savers. They spring to take robust action to rescue savers and maintain confidence in their respective finance centres.

In sharp contrast, what does Guernsey do?

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71

Muzeek

Michael
Very good level headed comment from yourself, which all Landsbanki depositors would do well to take on board.

Some of them are doing your cause no good at all.

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73

boatman

It’s a reality check I’d like the the greedy depositors to get, not one from the States.

We don’t have the money as an island to handover to those who thought they’d make a quick buck out of a risky investment.

I think it’s time for those, like me, that are fed up of the hard done by bleating of the already wealthy to stand up and make our voice heard that we don’t want our money used to pay for others bad choices.

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75

Stephen John

Jackie

Your question about how the Deposit Protection Fund and what happens if the losses exceed £100 million is interesting. I don’t know. Perhaps Deputy Maindonald can help?

What the £100 million cap on the Deposit Protection Scheme for 5 years suggests is beware of retail depositing in Guernsey. That applies to islanders as well as others.

Concerned Guern

I don’t think BCCI had an involvement in Guernsey, other than having Guernsey companies such as Guernsey Electricity deposit £5 million on the day the Bank of England pulled the plug. All this despite the warnings for months before of the standing of BCCI.

David

You told me on 3 March that “Yes – opting for withholding tax must be reasonable grounds for suspecting that the depositor is not going to be declaring the interest earned in his own country of residence”

If this is right it is tax evasion. I am not aware of any bank alerting the proper authorities of these suspicions. This suggests turning a blind eye to tax evasion. Not exactly helpful to the sqeaking clean image that Peter Nevin tries to sell and the CM and Peter Neville told the Commons Committee a few weeks ago!!!

Mr Ashbey

Your commment “Bottom line is that UK – NOT Guernsey – taxpayers bailed out the Guernsey branches of Northern Rock, RBS, Lloyds HBOS etc” makes the current Guernsey stance on LG look shabby and grasping.

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77

Michael

Concerend Guern.
BCCI never had a branch in Guernsey!
Daniel NO NEED TO SHOUT. Mind you an interseting comment. I see you are now saying western world. In the past its been world!
Thanks Muzeek

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79

Devils Advocate

Mr Ashbey – Your commment “Bottom line is that UK – NOT Guernsey – taxpayers bailed out the Guernsey branches of Northern Rock, RBS, Lloyds HBOS etc”

To be correct, the UK taxpayers bailed out Northern Rock, RBS, Lloyds and HBOS, who happen to have local subsidiaries, which may not have received or been in need of any such bailout. Which in fairness, was the case for Landsbanki prior to transfer of funds to the UK.
———————————————-
GP today – have to say, I think the meeting needs to be a public one, as the Action Group seeks payment from the public, the public should also be at the meeting. To suggest otherwise is very odd!!

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81

Concerned Guern

I see. But didn’t the States of Guernsey lose a subtantial amount of money with that bank (BCCI) and didn’t they with other creditors instigate proceedings against the Bank of England that went to trial in 2004 and if they were succesful the UK tax payer would have footed the bill to reimburse the states of guernsey and didn’t those proceeding collapse in 2005 so in effect the UK tax payer did not compensate Guernsey States for its lost deposit. Or am I wrong again

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83

paul

If the ‘Landsbanki depositers’ wish to make representation to G20, good luck. Surely then they will make direct contact with their own governments to make representation for them, supplying full information on their’losses’ how much money was with landsbanki along with their reasons for putting money in Guernsey etc etc etc.
If their governments feel they have a case let them deal with our government at that level. Stop this bleating how awful a place Guernsey is when most of you have never even been here!! I hope you all read the small print in future.

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85

David

Stephen
A huge majority of depositors opt to receive interest gross and to have thir information exchanged. They are clearly tax compliant. Deputy Trott is quite right on that.
Some prefer to suffer withholding tax. Guernsey deducts around £9m a year in withholding taxes based on the latest published information. That may be a fair amount of money in real terms but its only a small percentage of the overall bank deposit sector.
Why would depositors opt for withholding tax ? There are two answers. Firstly they may not be intending to pay their due taxes in their home country and so are happy to pay just 20% here. That’s a short-term strategy no doubt because the withholding tax rate is due to increase eventually to 35% and automatic exchange is eventually inevitable. Secondly there can be modest cash flow advantages from paying the withholding taxes and claiming the tax paid as a credit against their final tax bill, which is of course fine. I know some who do actually do that. But by and large the law requires us to report if we “reasonably suspect” tax evasion. It is reasonable to suspect unless it is known that the client is actually reporting his income.
So why do banks not report ? There are two schools of thought. Either they are turning a blind eye to it, which would be extremely dangerous for them, or alternatively they take the view that the EU itself offered their customers two options and they are exercising one of those two options and so its in accordance with EU law and that overrides domestic law in their country of residence. I can see that argument, and why it might be taken, but nowhere does it say that the Guernsey withholding tax is full and final settlement of the customer’s domestic tax liability re that income. If his tax rate is 40% and he has suffered 20% then has his remaining 20% liability gone away ? No it hasnt and that’s the problem area. The banks’ interpretation that their customers are fully complying with EU law is the key issue. One can see why may think that, but HMRC and the EU clearly interpret it differently.

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87

Muzeek

MmeLaGuillotine.

Brilliant comment.

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89

Springbok

SMITH
I see that we were both incorrect in forecasting the incoming weather.
It’s been changed to “TORNADO TROTT” followed by “HURICANE PARKINSON” bringing with them showers of new taxes.
I say not in any way disrectfully how could a lovely island like yours end up being dragged down by such poor governance.
Re my G20 attack, I don’t think I shall have to stir my-self too much as my work load is being taken over by Obama and Brown, who want their own hands on the “Offshore Loot” and they play very dirty like ‘most’ policitians.
Hopefully better weather forcasts to come, however, I doubt it
SPRINGBOK (Landsbanki Expatriats G20 Group)

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91

David

Fast Robert
And do you naively believe that Barry Brehaut is blameless in the whole incident ? I’ve heard it suggested that Deputy Brehaut regularly winds up several other politicans with his antics.

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93

David

Fast Robert
I’m saying that there are two sides to every story and that Barry Brehaut may not be as innocent as the anti-LT brigade would like him to be.

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