Property developer Michael Shanly, who is estimated to be worth £157m ($243m), was found guilty of tax avoidance on July 4 at Wood Green Crown Court, London in the first successful case of its kind.
Shanly has been ordered to pay HMRC a total of £830,000 in fines and compensation, as well as costs.
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Shanly, who pleaded guilty in the trial, was found to owe HMRC £1.5m in unpaid tax during a civil inquiry when it was revealed that he had a secret HSBC bank account in Geneva.
He opened the account with his own and his mother’s money, but following the death of his mother he transferred all the money out of the account to a charity. As a result Mr Shanly avoided paying £435,000 in inheritance tax, HMRC said.
The conviction was the direct result of the theft of an estimated 15,000 client accounts from HSBC Private Bank in Switzerland in March 2010.
That year, client account details, dating back to 2005 and 2006, were passed to French authorities after Hervé Falciani, a former employee of the bank, handed over information stored on his laptop.
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By GlobalDataHMRC obtained the offshore HSBC bank account data through a tax exchange agreement with France in April 2010 disclosing offshore accounts for more than 5,000 high net worth (HNW) UK investors.
HMRC sent letters to 4,500 of these investors in September 2011 asking them to choose between disclosing their untaxed assets and facing investigation.
On failure to disclose the assets HRMC said it opened the investigation that exposed the extent of the unpaid assets.
Shanly’s lawyer, Matt Bosworth, challenged the statement made by HMRC, claiming that the money in the account all belonged to Shanly’s mother. Bosworth added that the funds were transferred to the children’s charity Terre des Hommes.
Bosworth also said that of the £830,000 owed to HMRC, £387,103 had already been paid.
HMRC said criminal investigators continue to review the information obtained on the HSBC client accounts and further prosecutions are likely.
Source: Private Banker International
