ALL THE UK’S OVERSEAS TERRITORIES with significant financial centres have signed automatic tax disclosure deals with the government.
The Cayman Islands, Anguilla, Bermuda, the British Virgin Islands, Montserrat and the Turks and Caicos Islands have all agreed treaties and will pilot the automatic exchange of information bilaterally with the UK and multilaterally with the G5 – the UK, France, Germany, Italy and Spain – over the next six months.
The deals will see the UK, along with other countries involved in the pilot, automatically provided with much greater levels of information about bank accounts held by their taxpayers in those jurisdictions, including names, addresses, dates of birth, account numbers, account balances and details of payments made into those accounts.
It also includes information on certain accounts held by entities, such as trusts.
Gibraltar, which already operates the relevant transparency directives as part of the EU, has also made the same commitments.
Jersey became the most recent Crown dependency to strike such a deal with the UK, closely following Guernsey and the Isle of Man. Under those deals, UK residents with assets concealed on the islands will have 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% of the amount owed.
While in most cases, the deal will see evaders escape prosecution, HMRC offers no guarantees.
Unlike a similar deal with Switzerland, anonymity is not enshrined, while the deals will not have the immunity from criminal prosecution seen in the Liechtenstein Disclosure Facility. The UK received its first payment from Switzerland, amounting to £340m in January.
Chancellor George Osborne said: “This represents a significant step forward in tackling illicit finance and sets the global standard in the fight against tax evasion.
“I now hope others follow these governments’ lead and enter into similar commitments to this new level of transparency, removing the hiding places for those who seek to evade tax and hide their assets.”
Advisers questioned whether a potential increase in information could be managed by HMRC.
Saffery Champness private wealth partner Ronnie Ludwig said: “The department is under significant pressure to provide an immediate boost to recession-stricken Treasury coffers but remains severely under-resourced. As the flow of information to be analysed as part of its work increases, will HMRC have the manpower to make the most of increasing global tax transparency?”
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