Sovereignty talks will not hit Gibraltar's tax-light status, declare English lawyers

Britain's Rock: will continue to be 'fiscally attractive location' as offshore corporate venue

Gibraltar's attraction as a tax-light offshore corporate venue is not in danger, English lawyers working on the Rock said this week amid speculation that sovereignty might be shared between Britain and Spain.Gibraltar has been in British hands since the Treaty of Utrecht in 1713.

Last week, a joint statement from the Spanish and British governments said that Gibraltar's current status was 'unsustainable'.

A sovereignty sharing plan is believed to be under discussion.City giant Denton Wilde Sapte and Essex firm Cornish & Co have offices on Gibraltar, while Manchester frim Glaisyers has an associated office there of the same name.

A handful of English-qualified solicitors work on the Rock as local practitioners.Nick Keeling, managing partner of Denton's office, said that whatever changes came about would be unlikely to affect the common law principles of Gibraltarian law.He said it was unlikely that Gibraltar would become less independent as a result of the current negotiations, but would continue to be a 'fiscally attractive location'.Mr Keeling said that if sovereignty is shared, the pressure would be on the Spanish and the English to maintain the profitability of Gibraltar.English-qualified John Verrall, of Gibraltar-based Verralls Solicitors, said any changes to Gibraltar's current VAT-exempt status would need to be offset by the introduction of concessions for business.Both lawyers said the reforms would not be welcome in Gibraltar, where a majority must support fundamental constitutional changes in a referendum.Mr Keeling said: 'Gibraltarians are unlikely to vote in favour of a sovereignty sharing agreement between Britain and Spain.'Mr Verrall added: 'Gibraltar's chief minister Peter Caruana has refused to participate in the negotiations.

This means that there is little information on the island about what is actually going on.'He maintained: 'So long as Gibraltarians refuse to participate, it is unlikely that there will be any reforms.' Jeremy Fleming