All British Overseas Territories with significant financial centres have signed up to the UK government’s strategy on global tax transparency, with the potential to increase the number of tax investigations.
Following a recent move by the Cayman Islands, the government announced on 2 May that other Overseas Territories – Anguilla, Bermuda, the British Virgin Islands, Montserrat and the Turks and Caicos Islands – have agreed to greater levels of transparency of accounts held there. Gibraltar, which already operates the relevant transparency as part of the EU, has made the same commitments.
They have agreed to pilot the automatic exchange of information bilaterally with the UK and multilaterally with the G5 – the UK, France, Germany, Italy and Spain.
The agreement will mean that the UK, along with other countries involved in the pilot, will automatically receive much greater levels of information about bank accounts held by their taxpayers in these jurisdictions. This includes names, addresses, dates of birth, account numbers, account balances and details of payments made into those accounts.
The Isle of Man has also agreed to join the multilateral initiative and Guernsey has expressed a strong interest in engaging with the pilot.
This represents a step change in the level of international transparency applied to overseas investors, which could see the frequency of tax investigations increasing.
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.”
The agreements follow those reached by the UK and the Isle of Man, Guernsey and Jersey to exchange tax information automatically.
In the event of a tax investigation, working with the experts at Taxation-Investigation can help to clarify the taxpayer’s position, identify their options and help to mitigate the outcome where there are issues to be resolved.
