Cayman ready to benefit from high tax UK

In the wake of recent comments about Cayman’s possible demise, the chair of Cayman Finance has said that Cayman’s financial services sector is robust and poised to take advantage of Britain’s and other European states’ high tax regimes. Antony Travers said that far from “withering on the vine”, the Cayman Islands is flourishing in the current economic climate, which, he said, was understandable given that no Cayman Islands financial institution failed in the financial meltdown.

With zero percent income, capital gains and corporate tax, the jurisdiction is drawing particular interest from Britons thinking of leaving the UK, Travers believes.

Speaking in the wake of less than favourable reports about Cayman in the Financial Times this week, he said the reports fly in the face of the statistics, as it was not only funds that were on the rise but company incorporations for 2010 in Cayman were also on an upward trend, with increases of over 14 % for Q1 and 24% for Q2.

Travers said that Cayman was also in the perfect position to benefit from the Capital Gains Tax increase in the UK. With CGT going up to 28 percent, an increasing number of investors were looking to move to Cayman. “We have said all along that punitive tax measures in the UK and the rest of Europe will drive individuals and companies offshore,” he stated. ‘Whilst we welcome this we are continually saddened that there is still a hard-line group of EU politicians who cannot grasp that low taxes stimulate economies and high taxes do exactly the opposite by creating less of everything, including very often, tax revenue. That is the basis for the success of the Cayman model.”

Travers noted that he was not the only one making these claims and pointed to remarks by Deloitte’s Lucy Hardwick who told The Sunday Times, “The increase in the CGT rate to 28% is a tipping point for many individuals. Some will be looking to relocate to another country to mitigate rates.”