First criminal prosecution arising from stolen HSBC data relating to tax evasion
Date posted: Tuesday, 24th July 2012
Russell-Cooke's Regulation team, led by Peter Cadman and Matt Bosworth, were instructed by Michael Shanly (defendant) in the first criminal prosecution arising from the data stolen from HSBC bank (2010), relating to Swiss bank accounts and disclosed to the French authorities.
This stolen data was passed to the UK by the French authorities and subsequently the taxman has been targeting 6,000 Britons who were exposed by the list for hiding bank accounts in Geneva in Switzerland.
Russell-Cooke instructed William Clegg QC and Charles Conway of 2 Bedford Row to represent Mr Shanly.
Following a 'Code 9' and then Criminal investigation by Her Majesty's Revenue and Custom's (HMRC), it was held that the defendant had held an undeclared Swiss bank account in order to cheat the revenue by unpaid tax.
However, following a detailed defence put forward by Russell-Cooke, with assistance from Rawlinson & Hunter Chartered Accountants, the prosecution agreed that Mr Shanly had not avoided any personal tax liability but that there was unpaid tax on the Estate of his late mother. This had been overlooked when dealt with at the time of her death. Between the death of Mr Shanly's mother in 2004 and the three tax years that were the subject matter of the investigation, the money remained in a dormant Swiss bank account. However, the money was not Mr Shanly's, he was not required to include it in his income tax returns and therefore had no personal liability to pay income tax on the interest earned on the account.
Before the HMRC investigation had started the total sum of the account had been paid to a charity, Terre des Hommes. This charity works for the rights of disadvantaged children, developing and implementing projects designed to improve their living conditions, including focus on co-responsibility of receiving countries in inter-country adoption. This was in accordance with Mr Shanly's mother's wishes.
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. Furthermore, as administrator he ought to have made a separate tax return in his capacity as administrator to account for the interest accrued in the account until such time as the money was distributed from the estate to the beneficiaries.
At Wood Green Crown Court HMRC presented these facts to the Court. The Judge agreed that a custodial sentence of any sort was not appropriate. Mr Shanly was ordered to pay a fine and the costs of the prosecution and the matter is now at an end.
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