The latest release of offshore financial information has revealed little illegal activity, and will lack much of the punch that previous leaks enjoyed. However, it could still have significant consequences. While little direct regulatory action is in the offing, tighter reporting and disclosure of property holdings is the most likely outcome. The world was presented with yet another major offshore data leak on 3 October, 2021, courtesy of the International Consortium of Investigative Journalists. Branded the Pandora Papers by the media, the release contains 11.9 million files from various companies hired by wealthy clients to create structures and trusts in a range of offshore centres. While the cast of affluent individuals and high-profile politicians spans the world, there is little suggestion that the leak has revealed much in the way of illegal tax evasion. As such, there will likely be little direct impact on the wealth management industry or cases for tax authorities to prosecute.

The release does highlight the ability for affluent investors to use the offshore financial system to shelter assets from scrutiny - particularly property. The OECD’s Common Reporting Standard and the US’s FATCA have largely pealed back the secrecy surrounding financial accounts and securities. However, they have done little to force disclosure of non-financial assets such as property. Almost all of the high-profile disclosures in the Pandora Papers involve property in some shape or form. Many examples noted in the media involve property held via opaque offshore companies or trusts that shelter the beneficial owners from prying eyes, as well as saving them hefty tax bills. It is this entirely legal activity that is likely to grate the sensibilities of the average citizen - even if tax authorities are less exercised over it. Indeed, GlobalData’s 2021 Global Wealth Managers Survey found that property is the third most popular asset class among high net worth (HNW) offshore inv.