Hedge fund deposits not always welcome in Zurich

Date: Monday, March 21, 2011
Author: Heather Stewart, The Observer

Hedge fund staff who relocated to Switzerland to avoid UK tax are finding life in Zurich, above, less easy-going than in London.

GlaxoSmithKline boss Andrew Witty should be warmly commended for his engagingly old-fashioned view that a corporation is not a shiftless, stateless legal fiction that can be whisked off to the Cayman Islands at the wave of an accountant's pen.

His sentiments might well be shared by the staff of the London-based hedge funds who have recently relocated to Zurich to escape the 50p top tax rate, and found life there isn't quite as easy-going as in Knightsbridge or Notting Hill. Apart from the ski-freaks, many have found Switzerland's less than thrilling nightlife, the absence of 24-hour corner shops and the minefield of social and legal norms too much to take after the allure of London.

News reaches us of one poor soul for whom the final straw was a solicitor's letter, threatening legal action about a small deposit left on the next-door neighbours' lawn by his dog. Moving back to London cost him £8m in tax – including a hefty capital gains bill – but as far as his wife was concerned, it was apparently well worth it.