Tags: HSBC | Millionaire | Swiss | Bank

HSBC Millionaire Client Fined for Hiding Funds in Swiss Bank

Thursday, 05 July 2012 11:17 AM

Michael Shanly, a millionaire British property developer, was ordered to pay 830,000 pounds ($1.3 million) by a London court after failing to disclose offshore funds at HSBC Holdings Plc’s Swiss private bank.

“Mr. Shanly — like others — took advantage of his offshore account to hide money that was owed to the public purse,” Chris Martin, an official at the U.K. revenue and customs agency, known as HMRC, said today in a statement published on the department’s website.

Shanly, 67, who features at number 480 on the Sunday Times U.K. rich list, evaded 430,000 pounds of inheritance tax when his mother died, after he closed a Swiss account that held some of her money, according to HMRC. He was convicted yesterday of cheating the public revenue at Wood Green Crown Court.

The case is the first to come before a court using data obtained by HMRC from France in 2010 after Herve Falciani, a former software technician at HSBC in Geneva, stole data on at least 24,000 accounts. Investigations resulting from the Falciani data may lead to more than 100 criminal prosecutions, a person with knowledge of the matter said May 15, after HMRC reported that it was acting on information on about 6,000 individuals, companies, trusts and other bodies.

Increasing Wealth

“Individuals are responsible for their own tax affairs,” said Medard Schoenmaeckers, a Zurich-based spokesman for HSBC. “HSBC does not condone or assist tax evasion.”

The unpaid tax on his mother’s estate was overlooked at the time of her death, Shanly’s lawyer said in an e-mailed statement, which was forwarded by Tamra Booth at U.K. property company Shanly Group.

“As a result of the investigation by HMRC, Mr. Shanly accepted that he did have an obligation, as administrator of his mother’s estate, to include the capital sum and accrued interest, in her estate,” the statement from the lawyer said.

Shanly increased his wealth by 25 million pounds to 157 million pounds, according to the Sunday Times 2012 ranking published in April.

At the time of the data theft by Falciani, HSBC’s Swiss private bank had no more than 1,500 clients in any one country, a Geneva-based official, who declined to be named in line with company policy, said in May.

The U.K. and Switzerland completed an agreement in March to settle a dispute over tax evasion by wealthy Britons holding offshore accounts with Swiss private banks. Under the agreement, customers must either make a declaration to HMRC or pay a withholding tax that also covers their past failure to disclose undeclared assets.

The U.K. is targeting residents with bank accounts held outside the country as it seeks to plug a 35 billion-pound tax gap and help reduce the nation’s fiscal deficit.

© Copyright 2021 Bloomberg News. All rights reserved.

Thursday, 05 July 2012 11:17 AM
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