HSBC confirms that its chief owns Swiss bank account

HSBC have confirmed that its chief executive officer Stuart Gulliver uses a Swiss bank account to hold his bonuses.

The bank was responding to a recent report in the Guardian that Gulliver sheltered £5m in a Swiss bank account which he controls using a Panamanian company.

A spokesperson for Europe’s largest bank said that Gulliver had set up the account when he was living and working in Hong Kong, that full tax was paid in Hong Kong on the bonus payments and that Gulliver had voluntarily declared his Swiss account to UK tax authorities for a number of years.

She said that Gulliver set up the account in 1998 in the name of a Panamanian company for confidentiality purposes "and this had no other purpose and provided no tax or other advantage."

However, she did not say how much money the account contained.

HSBC has come under scrutiny after allegations surfaced that its private Swiss bank helped clients evade taxes. Gulliver has admitted failings in HSBC's Swiss branch in the period up to 2007, apologised to investors and customers, but said the business has been transformed and standards are now up to scratch.

Citing leaked files, the Guardian report said Gulliver was listed as the beneficial owner of an account in HSBC's Swiss bank in the name of Worcester Equities Inc, an anonymous company registered in Panama, containing a balance in 2007 of $7.6 million. 

Gulliver’s HSBC bonuses were paid through this entity until 2003. The Guardian added that chief executive also held a second account in the name of Worcester Foundation, which had been closed before 2007.

The Guardian also reported Gulliver had remained domiciled in Hong Kong for legal and tax purposes.

The HSBC spokesperson said Gulliver was a non-domiciled U.K. tax resident who moved to Hong Kong with his wife in 1980 where he became a permanent resident with right of abode.

"Hong Kong is Mr Gulliver's home and as a matter of law he is domiciled in Hong Kong. It should not be a surprise that Mr Gulliver, who has spent the majority of his nearly 35-year career at HSBC in Hong Kong, has made his home there," the spokesperson said. "Since being posted to the UK from Hong Kong in 2003, Gulliver has paid full UK tax on the entirety of his worldwide earnings, less a credit for tax paid additionally in Hong Kong (where he is also tax resident) on that part of the same earnings doubly taxed.”

She said that non-domicile status and the remittance basis rules do not affect the U.K. taxation of his worldwide earnings from HSBC.