By Aurindom Mukherjee
Feb 23 (Reuters) - Europe's biggest bank, HSBC saidits chief executive, Stuart Gulliver, holds a bank account inSwitzerland that was set up in 1998 to hold bonus payments,responding to a report in the Guardian newspaper that said hehad a Swiss account that contained $7.6 million in 2007.
A spokeswoman for the bank gave details of the account andof other issues related to Gulliver's tax status, following theGuardian story.(http://bit.ly/17K6Gda)
The spokeswoman said Gulliver set up the account when he wasliving and working in Hong Kong to hold bonus payments. Full taxwas paid in Hong Kong on the bonus payments and Gulliver hasvoluntarily declared his Swiss account to U.K. tax authoritiesfor a number of years, the spokeswoman said.
She said the account was set up in 1998 in the name of aPanamanian company for reasons of confidentiality "and this hadno other purpose and provided no tax or other advantage." Shedid not say how much the account contained.
There was no suggestion in the Guardian report that Gulliverbroke any rules.
HSBC is under scrutiny after allegations that its privateSwiss bank helped clients dodge taxes. Gulliver has admittedfailings in HSBC's Swiss arm in the period up to 2007 andapologised to investors and customers, but said the business hasbeen transformed and standards are now up to scratch.
The Guardian report, citing leaked files, said Gulliver waslisted as the beneficial owner of an account in HSBC's Swissbank in the name of Worcester Equities Inc, an anonymous companyregistered in Panama, containing a balance in 2007 of $7.6million. It was through this entity that Gulliver's HSBC bonuseswere paid until 2003, and he also held a second account in thename of Worcester Foundation, which had been closed before 2007,the Guardian said.
The Guardian also reported Gulliver had remained domiciledin Hong Kong for legal and tax purposes.
The HSBC spokeswoman said Gulliver was a non-domiciled U.K.tax resident.
He moved to Hong Kong in 1980 and became a permanentresident with right of abode, along with his wife who is anAustralian national, the spokeswoman said.
"Hong Kong is Mr Gulliver's home and as a matter of law heis domiciled in Hong Kong. It should not be a surprise that MrGulliver, who has spent the majority of his nearly 35-yearcareer at HSBC in Hong Kong, has made his home there," thespokesperson said.
"Since being posted to the UK from Hong Kong in 2003,Gulliver has paid full UK tax on the entirety of his worldwideearnings, less a credit for tax paid additionally in Hong Kong(where he is also tax resident) on that part of the sameearnings doubly taxed," the spokeswoman said.
Non-domicile status and the remittance basis rules do notaffect the U.K. taxation of his worldwide earnings from HSBC,the spokesperson added. (Reporting By Aurindom Mukherjee in Bengaluru; Editing byFrances Kerry)
HSBC Holdings (HSBA)