International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Thursday, February 26, 2015

How Does HSBC Group CEO Avoid Paying UK Tax ?

Bloomberg reported that "Only one British client of HSBC has been convicted for tax evasion after failing to disclosed funds held offshore in Switzerland."

HSBCThe UK HMRC has the account details of hundreds (or possibly thousands) of UK persons with HSBC Swiss bank accounts though (see ICIJ story).  

Now HMRC has HSBC's CEO Stuart Gulliver's Swiss bank account information (see the Guardian story excerpted below about Stuart Gulliver's Swiss bank account and UK non-dom status).  

Gulliver is also among those current and former clients of HSBC Suisse to take advantage of non-dom status. Gulliver is a registered non-dom based on his long residence in Hong Kong – now a special administrative region of China – which he considers to be his home, despite his UK-based position.

A representative for Gulliver said: “Having lived there since the 1980s, our client has become a permanent Hong Kong resident with right of abode, as has his wife who is an Australian national. Hong Kong continues to be their home albeit that our client now works primarily in the UK. As a matter of law, our client is domiciled in Hong Kong.”

Non-dom status can confer several tax advantages on those who claim the status compared with those domiciled in the UK. These include advantages in how inheritance tax is applied, but can also exempt worldwide income earned from outside the UK from incurring UK taxes – a system known as the remittance basis.

Separately, Gulliver did not become employed by HSBC’s main holding company when he took over as chief executive of the bank in 2011. Documents seen by the Guardian at the time showed that Gulliver took the job of chief executive officer as a secondment from the Dutch-headquartered HSBC Asia Holdings, rather than take a straightforward appointment to the UK parent company.

A spokesman for HSBC said around 350 of its staff were employed through the Netherlands. “About 350 of the bank’s most internationally-mobile employees are employed by HSBC BV,” he said. “This enables them to be employed/seconded to any part of the global group without the need to change contracted employer.”

https://lawprofessors.typepad.com/intfinlaw/2015/02/hsbc-group-ceos-swiss-bank-account-exposed-.html

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