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Pssst! Hey Buddy! Wanna Buy a Tax Haven?
The Rt. Rev. John Donne (1572-1631) in his Meditation XVII, indelibly informed the world that “no man is an island.”
But that doesn’t mean we can’t try for our own island.
Some years ago a World War II British gunnery fort in the international waters of the North Sea was proclaimed to be a quasi-independent outpost whose British owner, who styles himself “HRH Prince Roy,” calls it the “Principality of Sealand” Sealand never got off the ground, so to speak, since it was located in deep water.
But if you’re in the market for your very own genuine island, (and an official offshore tax haven to boot), one of the eight inhabited Channel Islands is up for sale.
The lease to the island of Herm, a 1½ mile “paradise” isle with white beaches just three miles from Guernsey, can be yours for £15 million (US$29.5 million).
Tax Free Channel Islands
Even though the U.K. government under the Labour Party has done much to curb tax havens worldwide, the historic fact is that some of the world’s major tax haven jurisdictions for decades have been England’s Crown dependencies, the Channel Islands and the Isle of Man.
Located to the south of the U.K., in the English Channel off the coast of France, the Channel Islands include Jersey, Guernsey, Sark, and Alderney. While each of these independent islands is associated constitutionally with the U.K., they have remained free of the U.K.’s taxes and most other financial and business restrictions. This broad financial freedom, coupled with determined self-promotion, have made these islands important world offshore financial centers in miniature.
The islands’ tax systems have been remarkably free of political manipulation for decades. Successive legislatures have preserved the standard income tax rate at 20% for more than half a century. Laws to reduce corporate taxes to zero are now in effect. There is no inheritance tax, gift tax, or other wealth taxes. The possibility of any increase in the income tax or the enactment of new taxes is remote because the islands want to continue to attract foreign corporate business.
Buyers of Herm will have their very own tax haven, paying 20% on income and avoiding death duties and capital gains, in common with other Channel Islands residents.
Lease from Guernsey
Herm is the first Channel Island to go on sale for years. The asking price for the 40-year lease includes a manor house, 13th century chapel, 80 acres of farmland complete with a dairy herd and what is thought to be the world’s smallest jail. Unlike the island of Brecqhou and their nearby sister island Jethou, Herm is open to the public and has become a popular tourist destination. Under the terms of the lease, the owner must allow tourists on to the island from “sunrise to sunset”.
Life on Herm offers a unique escape from the pressures of modern society. The island has no roads and the eastern half is fringed by sandy beaches, rising into sea cliffs to the west and south, which offer spectacular views across to Sark and Jethou. The most noted beauty spot, Shell beach, famed locally for its pear-white sands, is speckled with thousands of tiny colored shells.
The new owner is likely to find privacy in the main residence, a four-bedroom manor house, and neighboring fortified keep, which has been converted into three flats. The estate is surrounded by a granite wall and includes a swimming pool and ornamental gardens.
Constitutional Anomaly
In theory, the British parliament lacks power to enact laws for these islands. Technically, they are not considered a part of the United Kingdom. Jersey and Guernsey were originally part of the French Duchy of Normandy, which famously conquered Great Britain at the Battle of Hastings in 1066.
Her Majesty, Queen Elizabeth II, is the official head of state locally, not as Queen, but in her separate role and title as “Duchess of Normandy.” The Channel Islands are the only part of the original Duchy of Normandy still remaining under Her Majesty’s dominion.
Herm has a rich history with strong links to France. Normandy gave up rule of the Channel Islands in the 13th century, but Herm remained a refuge for Norman monks until the 15th century. In the 19th century, the island had a series of wealthy and colorful tenants including Prince Blucher von Wahlstatt, a German royal whose great-grandfather helped Wellington defeat Napoleon at Waterloo, Sir Compton Mackenzie, the author, and Sir Percival Perry, once chairman of Ford Motors.
Over the decades the Wood family has owned Herm they have painstakingly transformed it into a tourist destination. Adrian Heyworth, who doubles as the island’s part-time policeman, said: “It is quite simply the most beautiful island in the world.”
Other Posts from the Author
- Are You Among the 23% Entitled to a Second Passport? - May 14th, 2012
- The Real Problem With the French Elections - May 4th, 2012
- The Life of a “Sovereign Individual” - April 24th, 2012
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