The tax avoidance black hole revealed in the Panama Papers leaks should not taint the entire financial services industry, according to the head of one of the world’s leading IFA firms.
Although the shocking revelations show how billions of pounds was moved around the world in a network of secret deals to avoid tax, Nigel Green, chief executive of deVere Group argues much of the information is out of date and relates to a past era.
A whistle-blower handed 11.5 million documents relating to offshore companies, trusts and other investments to a German newspaper that have blown the lid off how the rich and famous shunted their wealth between countries only too happy to help them hide the true extent of their finances from the authorities.
The documents came from Panama lawyers Mossack Fonseca and date back four decades.
Tax havens ‘outdated’
“Clearly, tax evasion is illegal and punishable by law. It is a serious criminal global issue that needs to be tackled with more vigour,” said Green, speaking with the BBC.
“However, I do not believe that the Panama Papers allegations are representative of today’s wider international financial services industry.
“Many of the documents that have been revealed by the Panama Papers case date back decades.
“The idea of a tax haven, in the traditional sense of the phrase, is now somewhat outdated. Today, financial information is automatically exchanged with tax authorities globally and it is almost impossible to hide money. No longer can people stash assets on ‘treasure islands’ and not expect to be caught.”
Sensible financial planning
He added that moving money or other assets to an offshore financial centre to try to reduce any tax due is legal and above board, providing the transaction is declared to the appropriate authorities and is conducted in a transparent way.
“Offshore financial centres allow those who qualify to do so to use legal, bona fide international investment products to form part of a robust and sensible financial planning strategy,” said Green.
deVere Group is one of the world’s leading independent advisory firms for expats.
The company has more than 80,000 clients spread across 100 countries, while looking after more than $10 billion of assets.
