Research by tax refund experts, RIFT Tax Refunds, has revealed the world’s 10 worst offenders in the dubious world of offshore wealth and the respective tax losses subsequently inflicted on other countries.
The UK ranks second, but a further three British overseas territories make the top 10, and when these tax losses to other nations via this offshore wealth are combined, it sits at a staggering £64.5bn.
By taking advantage of the tax loopholes available through offshore investment, wealthy individuals and organisations worldwide can streamline the tax they pay. While it’s a very grey area that often attracts some unsavoury practices and people, it’s not illegal.
When it comes to the nation inflicting the largest tax losses to other global nations due to the offshore wealth held there, the notorious tax haven of the Cayman Islands ranks top. With an estimated £35bn each year, the tax lost to the offshore wealth held in the Cayman Islands sits comfortably ahead of any other country.
Despite the crackdown on dirty money held in the UK by Russian nationals, we rank as the world’s second-worst offender, costing other countries £23bn in tax losses every year due to the offshore wealth held here.
The US ranks third where offshore wealth contributes to £15bn of tax losses each year, with Luxembourg (£12bn), Ireland (£7bn), the Netherlands (£6bn), France (£3.5bn) and Hong Kong (£3bn) also rank amongst some of the worst.
While Hong Kong hasn’t been under the control of the British Empire since 1997, two other British overseas territories make the top 10. The British Virgin Islands sits seventh, with the offshore wealth inflicting tax losses of £3.8bn per year, while Jersey is the tenth worst offender at £2.5bn. The combined tax loss to offshore wealth across the UK and these three British overseas territories sits at £64.5 billion per year.
CEO of RIFT Tax Refunds, Bradley Post, commented: ‘It’s fair to say that UK tax laws are fairly rigorous, and while there are ways to improve your tax efficiency, those with a substantial level of wealth will often exploit a myriad of loopholes to reduce the tax they owe dramatically. One of these loopholes in the process of holding wealth within offshore tax havens, but while the legalities are complex, it’s not technically illegal.’