Guernsey's Chief Minister, Lyndon Trott, has firmly rejected
suggestions that the Island might require a 'bail out' from
the UK taxpayer.
The financial stability of the British Crown Dependencies and
Overseas Territories has come under scrutiny in the media during
recent weeks. This follows reports that the Cayman Islands has a
$82mn revenue shortfall in its budget due to the impact of the
economic crisis on its financial services industry and the British
Government has refused to sanction $462bn of bank loans until the
jurisdiction widens its tax base and brings expenditure under
Guernsey's Chief Minister, Lyndon Trott, said: "I
cannot foresee any circumstances where the need would arise for the
UK taxpayer to 'bail out' Guernsey. Guernsey has no
national debt, zero borrowing, fully funded public liabilities and
unencumbered property assets of over £1.5bn.
"Guernsey is not a tax haven - best illustrated by the
'whitelisting' of Guernsey by the OECD in April, where it
was designated as one of the jurisdictions leading the way on tax
transparency, along with other jurisdictions such as the UK, the US
and France. Indeed Guernsey led the way on bilateral tax
information exchange agreements when the process began in 2002.
"The government of Guernsey welcomed the appointment of
Michael Foot to lead this timely review, and we hope that one of
its positive outcomes will be to increase understanding and reduce
the misperception of Guernsey in particular, and crown dependencies
Guernsey was placed on the Organisation for Economic
Co-operation and Development (OECD) 'white list' that was
published at the conclusion of the G20 Summit in London, April
2009. The 'white list', including the UK and the US,
represented those jurisdictions that had substantially implemented
the internationally agreed tax standard.
Guernsey has continued to sign bilateral tax information
exchange agreements (TIEAs). The latest, with New Zealand at the
end of July, took the total signed to 14 and was the twelfth with a
Member State of the OECD.
Guernsey had previously signed TIEAs with Denmark, Faroe
Islands, Finland, France, Germany, Greenland, Iceland, Ireland,
Netherlands, Norway, Sweden, United Kingdom and United States of
Probably the most significant change from previous practice in Guernsey law under the Companies (Guernsey) Law 2008, which came into effect on the 1 July 2008, was the consignment to history of the concept of capital maintenance, which was discarded in favour of a solvency model as the basis of a company’s ability to pay distributions and dividends.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).