| Summary: | This is a study of tax policy and administration from the introduction of estate duty in 1894 to the outbreak of World War II. The thesis analyses the response of the British state to offshore tax avoidance, defined as the legal reduction of taxes by the use of cross-border regulatory arbitrage. The periodization is deliberately chosen to problematize two common assumptions: first, that offshore avoidance began with and was caused by tax rises during World War I; and secondly, that offshore avoidance was comparatively trivial in the interwar period and only saw significant growth after World War II. The thesis argues that in fact, offshore avoidance was a concern for the authorities well before 1914, while from a British perspective, the interwar years arguably marked its apotheosis, because stringent measures taken to suppress it in the run-up to World War II made it harder to achieve from then on. The questions that the thesis addresses are why offshore avoidance was able to flourish with virtual impunity until the mid-1930s; and whether there was an essential difference between the state’s approach to avoidance by individuals and its attitude to avoidance by business. Engaging with those issues entails diverging from the existing literature, which is generally content to assume that the prevalence of tax avoidance is a function of the tax rate. The thesis proceeds by reconstructing the changing shape of the British tax code and investigating the forces that shaped its evolution, in order to understand how offshore avoidance was implemented and why it proved so difficult for the authorities to counteract. By the end of the period, the state was in the ascendant, yet this was not a smooth progression; it was one characterized by bargaining and punctuated with reversals. The history of offshore avoidance is to an extent cyclical, and the underlying tensions reflected in that process are still relevant today.
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