25 Oct 2017
Offhshore-based law firm Appleby and the Isle of Man government are bracing themselves for the impacts of a new scandal which could thrust the secret deals of wealthy clients into the open.
The revelations are set to be based on a data leak involving Appleby, which has branches in Bermuda, the Cayman and British Virgin Islands, central to an investigation by the International Consortium of Investigative Journalists (ICIJ) and a number of broadcasters and newspapers.
A key allegation is that aircraft buyers have been using the Isle of Man for abusive tax avoidance schemes.
A spokesman for the Isle of Man government said there is a regime in place where business jets can be imported to the European Union through the Isle of Man and obtain a 100% refund if the aircraft is purely for business purposes.
He denied that the scheme was illegal, saying even the United Kingdom has a similar structure in place.
Separately, the British crown dependency is understood to have been in trouble before over tax loopholes involving assets for the wealthy, specifically that UK tax collector HMRC shut down an Isle of Man-linked leasing scheme for importing yachts into the EU in 2010.
Appleby declined to comment beyond a press release it issued denying wrongdoing.
On Wednesday the Isle of Man spokesman declined to comment on the yachts issue.
The ICIJ, which broke the Panama Papers expose, is expected to publish the allegations about the aircraft tax ‘loopholes’ soon.
However, parties hit by the new revelations have decided to speak out ahead of the story, rather than the usual norm of speaking after the news breaks.
Appleby put out a statement refuting the allegations, saying it is “satisfied that there is no evidence of any wrongdoing, either on the part of ourselves or our clients.”
The Isle of Man stated in a press release: “Like all responsible members of the global community, we take allegations of this nature extremely seriously … during the course of our own on-going review, we have found no evidence of wrongdoing or reason to believe that our Customs and Excise has been involved in the mistaken refunding of VAT.”
Chief Minister Howard Quayle MHK said: “In light of the claims made by the ICIJ, we have asked HM Treasury to look at all elements involved in the process of the importation of business jets via the Isle of Man into the EU.”
– By Irene Madongo
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