Wednesday, March 10, 2010
Stockbroker Shore Capital has announced that as soon as it has demerged its German Property business, Puma Brandenburg, it will decamp from the UK and expand its operations with the creation of two new holding companies, Shore and Puma Brandenburg, both to be based in Guernsey.
While denying the move is motivated by fiscal reasons, founder and 40%-stakeholder, Howard Shore told shareholders in a memo that Guernsey would provide "a more stable tax environment and a regulatory environment better suited to an internationally expanding business.”
Shore has had Guernsey operations since the 1990s and described the move in the Indepenent newspaper as a “natural progression… driven by our desire to expand our business internationally.” The Group "will continue to pay UK tax on its stockbroking activities,” the firm added.
The firm joins a slew of UK companies that have decided to switch tax residence. A recent study found that when the 50% tax rate on those earning more than GBP150,000 is introduced in April, the UK will become the most expensive financial centre to base operations. UK companies face additional uncertainty with no concensus on how the UK's deficit will be tackled, and the prospect of a hung parliament.
The move will allow Shore Capital to partly avoid the UK’s more stringent tax regime and the group will also benefit from Guernsey’s 10% corporation tax, applied to finance companies on the island.