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Taxation

Volume 164: debated on Thursday 11 January 1990

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To ask the Chancellor of the Exchequer (1) if he will investigate the extent of tax avoidance and evasion through the creation of business transactions carried out solely or mainly for tax reasons between United Kingdom based trusts, companies and individuals and trusts and companies based in (a) Jersey, (b) the Isle of Man, (c) Guernsey, (d) the Netherlands Antilles, (e) the Cayman Islands and (f) Liechtenstein during the last five years;(2) if he will make it his policy to review all high court cases involving the Inland Revenue in seeking to recover £1 million or more of tax revenue and to bring in legislation to prevent the loss of such tax revenue where it has been lost as a result of transactions created between United Kingdom based companies, trusts and individuals

and companies or trusts or individuals based in

(a) Jersey, (b) the Isle of Man, (c) Guernsey, (d) the Netherlands Antilles, (e) the Cayman Islands and (f) Liechtenstein;

(3) if he will publish an annual table of information about tax avoidance and tax evasion by United Kingdom based trusts, individuals and companies through transactions created with trusts and companies in (a) Jersey, (b) the Isle of Man, (c) Guernsey, (d) the Netherlands Antilles, (e) the Cayman Islands and (f) Liechtenstein;

(4) if he will set up a system requiring the prior notification to the Inland Revenue of business transactions between United Kingdom-based trusts, companies and individuals and trusts and companies based in (a) Jersey, (b) the Isle of Man, (c) Guernsey, (d) the Netherlands Antilles, (e) the Cayman Islands and (f) Liechtenstein;

(5) what proposals he has to prevent tax revenue being lost to the Exchequer through the use of business transactions created solely or mainly for tax reasons between United Kingdom-based trusts, individuals and companies and trusts and companies in (a) Jersey, (b) the Isle of Man, (c) Guernsey, (d) the Netherlands Antilles, (e) the Cayman Islands and (f) Liechtenstein;

(6) if he will make it his policy to bring forward amendments to company law to prevent tax avoidance and evasion by United Kingdom companies through the creation of business transactions solely or mainly for tax purposes with companies, trusts and individuals based in (a) the Cayman Islands, (b) the Netherlands Antilles, (c) Guernsey, (d) the Isle of Man, (e) Jersey and (f) Liechtenstein; and if he will make a statement.

[holding answer 10 January 1990]: The Inland Revenue devotes substantial resources to countering tax avoidance and evasion including the kind of offshore transactions involving tax havens to which the questions refer. Where appropriate the Government would not hesitate to bring forward such further legislation as was found to be necessary.To require general notifications of business transactions with tax havens would, however, impose a substantial and unreasonable burden on business.