Weekly and Offshore Overviews, March 27 2008

Offshore the US sharemarket has recovered 4% over the week and some glimmers of hope regarding the banking crisis have appeared. But the fundamentals argue against any quick resolution of the sub-prime related problem and bad data released late in the week on consumer sentiment, the housing market, and business investment imply the drift in the US economy remains firmly downward for now.

In the UK the Bank of England Governor has admitted that cutting interest rates 0.5% has not actually helped borrowers because bank funding costs have been pushed up by the liquidity crisis. In Australia mortgage rates continue to creep up in the absence of any official monetary policy tightening and motor vehicle data show a 16 year low in consumer confidence is affecting spending.

Austria and Luxembourg showed resistance to tightening rules on tax dodgers who stash their cash in offshore accounts

The EU finance ministers called on the European Commission to bring forward a review of the savings tax directive to May if possible, and then come up with reform proposals "in due time."

"The commission will prepare a report on the functioning of the savings taxation directive and on the basis of this report the commission will present some legislative proposals if appropriate," EU Tax Commissioner Laszlo Kovacs told reporters.

In its present form, the savings tax directive requires EU members to share tax information with one other on interest income kept by account holders from other EU countries.

However, it was only agreed after special arrangements were made for Austria, Belgium and Luxembourg, which were eager to protect their banking secrecy practices.

Taiwan's Cabinet approved a proposal to let the island's banks acquire as much as a 20% stake in Chinese lenders

The approval, which will help Taiwan banks expand to the fast-growing Chinese market and serve the hundreds of thousands of Taiwanese doing business and working in China, is the latest relaxation of rules covering China-bound investment by the ruling Democratic Progressive Party ahead of the March 22 presidential election.

Last week, the Cabinet said it would let Taiwanese companies invest as much as 40% of their consolidated net asset value in China rather than up to 40% of their net asset value currently.

The financial subindex of the Taiwan Stock Exchange ended up 0.9% following the announcement. The benchmark index closed 0.6% higher.

"We understand that local banks want to provide services where their customers are," Huey-Jen Jong, deputy director-general of the Financial Supervisory Commission's Banking Bureau, said at a press briefing after the Cabinet's weekly meeting.

Offshore havens face fresh probe

WEALTHY investors who have salted their cash away in offshore investments to escape the British tax authorities have been warned they face another broadside, this time from the European Union.

Germany is lobbying the EU to extend the 2005 savings tax directive which forced tax authorities to reveal information about those who earned savings income in offshore bank accounts in the wake of a dispute with Liechtenstein over anonymous trust holdings.

The savings directive affected only interest from bank accounts, however, and not dividends from shares, discretionary trusts, structured products and offshore insurance bonds.

This led to billions of pounds pouring out of Jersey bank accounts into complicated products that were outside the rules.

Offshore banking 'a good option'

Consumers who are thinking of moving abroad could opt to take out offshore banking accounts, NatWest has suggested this week.

Products in this sector are growing in stature and therefore should be considered by such individuals, an official at the bank noted.

Head of NatWest international personal banking Dave Isley argued that there are many benefits to be seen from such banking methods, including those on the "taxation side".

And there is a "suite" of products on hand for people in a totally different area of the globe, he suggested, including cheques and credit cards.

Banking abroad is now improved so that the situation has undoubtedly improved, Mr Isley asserted.

He commented: "Banks are becoming more and more sophisticated at providing very good products to help them do that."

Divorce Settlements and the Case for Offshore Asset Protection

You only need to take a look at court cases involving divorce issues these days and realize what the world is coming to. Famous celebrity weddings have ended in divorce with one party seeking half the entire wealth of the other party. It’s especially painful and frustrating to work all your life for what you own and have someone take that all away by virtue of the fact that they were married to you. Women most especially ask for the equal sex treatment when it comes to all other areas of life but when it comes to wealth and alimonies, they conveniently feign ignorance of the “equal sex” concept.