UK strikes tax disclosure deal with Guernsey
Subject to approval by Guernsey's parliament, the Channel Island is to enter into a tax disclosure deal with the UK
GUERNSEY IS TO ENTER INTO a tax disclosure deal with the UK.
They have agreed in principle to terms that will see improved information reporting between the two, as the coalition government continues its attempts to clamp down on offshore account holders.
Subject to the approval of the Channel Island’s parliament, the accord – the second between the UK and a Crown dependency – will see alternative reporting arrangements for non-domiciled UK tax residents, a revised double-taxation agreement and an automatic disclosure facility.
The announcement comes as Guernsey also moves towards concluding a similar agreement with the US on the Foreign Account Tax Compliant Act (FATCA).
The UK last month struck a deal with the Isle of Man, part of which will see UK residents with assets concealed on the island given until September 2016 to disclose details to the taxman and pay any tax owed to the HMRC, as well as a fine between 10% and 20%. While in most cases, the deal will see evaders escape prosecution, HMRC offered no guarantees.
Unlike a similar deal with Switzerland, anonymity is not enshrined in the Manx agreement, and it does not feature the immunity from criminal prosecution seen in the Liechtenstein Disclosure Facility. The UK received its first payment from Switzerland, amounting to £340m, in January.
It is expected the Guernsey deal will have similar provisions, although it has not yet been confirmed. Greater detail will be provided “in due course”, Guernsey said.
Guernsey’s chief minister Peter Harwood said the move will “reinforce Guernsey’s commitment to tax transparency”.
He said: “Guernsey is fully committed to combating tax evasion and the principle of automatic exchange and our twin IGA approach to US/UK reporting will provide our industry with a very strong platform to compete on the world stage against weaker, less transparent and compliant jurisdictions.”
Andrew Watt, co-founder and partner at Watt Busfield Tax Investigations, warned further arrangements will be put in place by the UK.
He said: “This is life now. There will be a succession of these deals to follow over the next five or ten years. It’s a sign of the times, and life is going to get much harder for people concealing assets offshore.”