Barclays Says Savings Tax Row Influenced Decision To Locate Holding Company In IOM

by Jason Gorringe, Tax-News.com, London

26 April 2002

The Director of Barclays Jersey, Martyn Scriven, spoke out this week regarding the bank's decision to locate Barclays Private Clients International - which will act as a holding company for all of Barclays' Channel Island offshore banking activities - in the Isle of Man.

Speaking to the Jersey Evening Post on Wednesday, Mr Scriven admitted that the UK's apparent vendetta against Jersey over non-compliance with a European savings tax directive had influenced the organisation's decision not to locate its wealth management headquarters there, a fact which will doubtless anger the States of Jersey authorities given the disruption already caused by the United Kingdom's ill-considered ultimatum.

'The finger was pointed very heavily at Jersey, which colours the decision,' the banking chief explained. 'Had we gone for incorporation in Jersey, we would have been more worried than we currently are.'

It is thought that moves in the UK budget to levy additional taxes on controlled foreign corporations (companies located overseas, but controlled to a significant extent by UK citizens or interests) in jurisdictions with tax practices of which the British government disapproves, may also have influenced the bank's decision.

However, Mr Scriven told the Jersey newspaper that expense was also a factor in Barclays' decision to incorporate in the Isle of Man:

'My personal view is that there is a strong argument in favour of the Isle of Man on the basis of cost,' he said, explaining that: 'It is more expensive to operate from here (Jersey) and the inflation rate of 4% does not help. In terms of staff it is marginally easier in the Isle of Man and a number of the bank's processes are run there already.'

Speaking on Tuesday, Vice President of the Policy and Resources Committee, Senator Frank Walker announced that the release of a new fiscal strategy consultation document could be delayed by up to four weeks while the authorities assess the implications of recent events.

Recommended