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Report highlights value of Jersey to the UK economy

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Law firm Mourant Ozannes has welcomed a report commissioned by Jersey Finance to analyse the economic relationship between Jersey and the UK.

 
Mourant Ozannes advises on the laws of the BVI, Cayman Islands, Guernsey, and Jersey, where the firm has been practicing Jersey law since 1947.
 
The report by Capital Economics, published on 2 July 2013, demonstrates for the first time the substantial contribution made by Jersey to the British economy in terms of facilitating foreign investment, providing billions in vital liquidity to the UK banking system and supporting many tens of thousands of jobs. 
 
According to the report, Jersey helps the UK generate around GBP2.3bn in tax revenues each year and supports 180,000 British jobs.
 
GBP1 in every GBP20 of money invested by foreign individuals and companies in assets located in Britain reaches the UK via Jersey.
 
Each year, Jersey banks send around GBP120bn of their deposits to parent operations in the UK, representing 1.5 per cent of the funding of the whole UK banking system.
 
Two-fifths of all assets administered or managed across Jersey’s financial and wealth management sectors come from markets outside the UK and EU.
 
The report also considers the issue of so-called “tax leakage” from the UK mediated through Jersey, concluding that losses to the UK Treasury through legal tax avoidance are estimated to be no higher than GBP480m a year and are probably much less. 
 
No more than GBP150m a year of British taxes could potentially be evaded using Jersey, but recently approved information exchange agreements will substantially reduce or eliminate the potential for tax losses.
 
Although some UK tax may leak through Jersey, the amounts are dwarfed by the estimated GBP2.3bn of taxes paid on British jobs and profits supported by Jersey.

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