The Legacy (17 page)

Lucy and Isobel took another taxi into the Old Town. They passed Waverley Station as they headed across the city towards the Royal Mile. It always surprised Lucy just how busy railway stations were, whatever the time of day. They crossed the Royal Mile and then headed down towards Grassmarket, stopping in the main square. She liked this part of Edinburgh. The narrow cobbled streets and tall buildings had, she suspected, changed little over the last few hundred years. She paid the taxi driver and started walking towards Victoria Street. She had been here many times before. It was a steep climb up towards the Castle but the street had a real charm. The tall buildings housed offices and flats on the upper floors but at ground level there were lots of smaller restaurants and a few excellent pubs. Isobel followed, surprised at the seemingly endless procession of tourists walking down from the Castle towards their waiting coaches.

‘Do you ever shop here?' Isobel asked Lucy.

‘Sometimes. There's some really cool shops but they tend to be expensive,' answered Lucy, stopping opposite a beautifully preserved Georgian building. ‘I think this is the address McLeod gave us.' She took a piece of paper out of her pocket and checked the address she'd written down in McLeod's office with the brass number on the sturdy looking black door in front of her. ‘Yup, this is it,' she said, pressing a discretely hidden intercom button on the door frame. It was answered almost immediately.

‘Good morning, can I help you?' asked a well modulated female voice.

‘Yes please. My name's Lucy Masters. I believe I have an appointment with Mr Warton,' answered Lucy.

‘Please come in. Mr Warton will come down and meet you,' replied the voice.

Lucy heard the sound of the lock being released and pushed the door open. Isobel followed her inside. ‘Wow,' said Isobel when she saw the inside of the building. She'd expected something similar to Murdo McLeod's offices but this was completely different. The building's façade might have been Georgian but the interior had been completely gutted and re-built along very modern lines. At its heart was a central glass atrium. Looking up, Isobel could see that each of the six floors above her opened onto the central atrium which, at ground level, was filled with exotic looking plants. The roof of the atrium was also made of glass, allowing the late morning sun, which was almost directly overhead, to flood the building with light. It reminded Lucy of Harry's flat in Kathmandu, except that there was far more glass. Lucy turned as she heard the quiet whoosh of a door opening behind her. A man stepped out of a glass-sided lift and came towards them.

‘Miss Masters?' he enquired. Lucy nodded. ‘My name is Timothy Warton,' he said, extending his hand towards Lucy. ‘I'm terribly sorry to hear about your father. A tragic business.'

‘Thank you and thank you for seeing us,' replied Lucy, shaking his hand. She introduced Isobel and then explained why she'd come to see him. Warton listened politely and then suggested they follow him up to his office. He led the way towards the lift. He could see the girls looking around the inside of the building.

‘We had the renovations done a few years ago,' said Warton as the lift doors closed. ‘It's much better than the pokey old offices we used to have.'

‘Yes,' replied Lucy, ‘it's quite remarkable.'

The lift stopped on the sixth floor and opened onto a corridor that ran between the central atrium and the glass walls of the offices that lined the four sides of the building. There was an air of quiet efficiency. Lucy noticed that people were going about their business in a calm and unhurried manner. There were no raised voices and even the phones seemed to ring in a subdued way. Warton led them to a large corner office, stopping in front of the glass door to enter a code into a keypad.

‘What exactly does your company do Mr Warton?' asked Lucy.

‘We provide financial advice,' answered Warton. ‘We specialise in providing a range of discrete financial services to people with particular needs. I'll explain more in a moment.'

The office door clicked and Warton pushed it open, stepping aside to let the girls enter. He followed them in. ‘Please do sit down,' he said, pointing at a glass conference table at the far end of the room. The table looked as though it had been set up for the meeting. It had four black leather chairs arranged round it, two on each side. A pencil and pad had been laid out on the table in front of each of the chairs. A jug of iced water and four glasses stood on a silver tray in the centre of the table.

Lucy and Isobel sat down on the far side of the table. Lucy looked round the office as Warton closed the door. It was very different to Murdo McLeod's. Whereas McLeod's office had been comfortably old fashioned, this was ultra modern. What little furniture there was seemed to be made entirely of leather, glass or black metal. At the other end of the room to the table was a glass desk with another expensive looking leather chair behind it. The only things on the desk were a slim laptop, a phone and a black leather folder. Lucy noticed that the two pictures on the wall were modern watercolours of the Castle, one looking South from the Firth of Forth and one looking up from Grassmarket. There were no personal items in the office, nothing to indicate the sort of man that Warton might be. The only hint of colour came from a beautifully woven rug that filled the space between the desk and the conference table.

Warton went over to his desk and picked up the folder. He opened it as he walked back towards the table and started to read as he sat down opposite the two girls. Lucy watched him as he read. He looked about forty-five. Of average height, his light grey suit fitted his slim figure perfectly. His dark brown hair was swept back from his forehead. Though slightly greying at the temples, it was thick and immaculately cut. He was, she thought, quite handsome in a sort of TV anchor man way. She wondered what her father had made of him. He didn't have much time for city types. ‘They're all clones,' he used to say. ‘Eton, Oxford, City. The thick ones join the Guards or go in the Navy.' She smiled as she thought of her father. She was starting to realise just how important he had been to her, even though she hadn't seen much of him.

‘Miss Masters?' said Warton gently, conscious that Lucy was lost in thought.

‘Sorry,' said Lucy, ‘I was miles away.'

‘That's OK,' said Warton. ‘I was just saying that I saw your father about two years ago. I wouldn't normally go into the details of what we discussed but Murdo McLeod phoned me last night and asked me to be straight with you. I am not entirely comfortable with this but, given the circumstances and as a personal favour to Murdo, I'll do what he asked. If you don't understand anything I say, please do stop me and I'll try and clarify. Do you understand?'

‘Yes, thank you,' replied Lucy.

'Your father came to see me for advice on where he could deposit several million pounds without too many questions being asked. He wanted to be able to access the money from anywhere in the world, at any time of day and at very short notice. He also wanted to be able to shield it from the UK tax authorities if he chose to.'

‘Is that legal?' asked Lucy.

‘Having the accounts is, yes,' replied Warton. ‘As a UK resident, it would have been illegal for him not to pay tax on any interest he earned but simply having money in an offshore account is perfectly legal. If you are resident in the US, then you have to declare any amount over ten thousand dollars that you have off shore but we are more civilised here in the UK. Provided you pay the tax you owe, you can have as many offshore accounts as you like.'

‘OK,' said Lucy, ‘please continue.'

‘We opened numbered accounts for him in three separate banks, one in the Cayman Islands, one in Gibraltar and one in Switzerland. We advised him to spread his money across a number of banks because, in some respects at least, putting your money in an offshore account can be riskier than putting it in your high street bank. For example, the compensation you receive if an offshore bank collapses is very often a great deal less than what you would receive if your money was in a UK bank and it went bust. It therefore made sense to try and mitigate the risk by investing in different banks and in different geographic locations. He wanted the accounts to be as anonymous as possible so we suggested numbered rather than named accounts. Again, this is entirely legal but the difficulty with this setup is that now that he's passed away you will struggle to get access to the money without the account numbers and the passwords that protect them.'

‘I think I have those,' said Lucy. ‘Murdo McLeod gave me a letter from my father which had the details of three offshore bank accounts in it. The details included the names of the banks, the account numbers and the passwords. I've got them with me.'

‘Good,' replied Warton, ‘we can go through those in a minute. As I said, there's nothing illegal about having the accounts but there is an expectation that he would declare any interest he earned and pay any tax that was due. There's also an assumption that he earned the money legally and that he paid tax on it when it was given to him. Now that he is unfortunately deceased, the money should be included in his estate and should be taken into account in calculating any inheritance tax due. Strictly speaking, you shouldn't access the accounts until his estate has been settled.'

‘OK,' said Lucy. ‘I think I understand.'

‘But there is a problem,' continued Warton. ‘Your father wanted the accounts as a sort of financial parachute. Quite a few of our customers do this. The money is only ever used if things go badly wrong for them here in the UK. I have no idea how your father made his money. It's none of my business but I suspect he didn't pay any tax on it when it was earned. I also suspect that he didn't declare any interest. Because of this, you may have to answer some pretty awkward questions if the money were to be included in his estate. It's clearly up to you but you might wish to consider whether you should keep the existence of this money to yourself.'

‘Won't the banks tell the UK authorities?' asked Lucy.

‘No. The accounts are numbered and not in your father's name. Even if the banks knew that your father had died, there is nothing to link him to the money in the accounts as we set them up in a particularly complicated way to obfuscate ownership. In terms of tax, the banks take the view that it is a personal responsibility. Their job is to keep the money safe and pay whatever interest is earned straight back into the accounts. They leave it to the customer to determine how much tax is due, both when the money is earned and on any interest that they pay, and then to pay it to whichever government should receive it. Normally, but not always, it's the government of the country in which the customer is a resident. If you think about it, this approach makes sense. Each of the banks will have money from thousands of different customers living in lots of different countries. Each country has a different tax regime and therefore each customer's circumstances will be unique.'

‘But what does this mean for me?' asked Lucy. ‘Can I access the money or not?'

‘Yes. You have the account numbers and you have the passwords. In the globalised era in which we live, that and access to the internet is all you need to transfer the money pretty much wherever you want. But I would suggest that you need to be careful. If you transfer large sums into your UK bank accounts, then there is a danger that you will attract unwanted attention. The UK banks have a responsibility to report any large and unusual movements of capital. It's all part of the government's drive to reduce money laundering. I think you have a number of options open to you.'

‘OK, I'm still with you,' said Lucy.

‘One option is for you to declare the money in the accounts and ask that it be included in your father's estate. Eventually, you might get some of it back. The problem with this is that we know he probably didn't pay any tax on it and Her Majesty's Customs and Revenue will be able to check this by going back through your father's tax returns. We could try and say that he paid tax in a different country or that it was exempt from tax but we will need to prove this. If we can't, then things will start to get complicated and they will want to deduct income tax before they even begin to think about inheritance tax, and that's if they accept that it was earned legally which they might not. The other option is to keep the accounts to yourself. There are some circumstances in which this might be legal but I suspect they don't apply in this case. You therefore need to understand that, as a UK resident, you might be breaking the law if you were to do this. But you might consider the risk to be worth it, particularly if you were planning to live abroad.'

‘What would you do?' asked Lucy.

Warton smiled. ‘It depends. The problem you have is that if you wish to keep the money secret from the UK authorities, then you need to avoid it going through your UK bank. The best way to do this is to use a debit card that links directly to the offshore accounts. Perhaps surprisingly, most offshore banks now do this. They are, in many ways, becoming increasingly like their high street cousins. This would mean that you could spend the money as and when you liked without it ever going through your UK bank. Clearly, if you took out a large sum of money to buy a particularly smart house in Edinburgh and if this appeared to be beyond your means, then there is a chance that someone might start asking questions. So you would need to be careful. But your father also had a fair amount of legal wealth. I know for a fact that he paid tax on all the money that went into his UK accounts and I recall, certainly two years ago, that his savings amounted to several million.'

Lucy thought for a moment. ‘OK. So after I've paid inheritance tax on my father's legal estate, I will be several million pounds better off and this will be legally mine.'