New tax scrutiny agreements for British overseas territories and crown dependencies
British expats with bank accounts in overseas territories and crown dependencies will be subject to greater tax scrutiny after UK Chancellor George Osborne announced new commitments to tackle tax evasion and enhance transparency. He said that all British Overseas Territories with significant financial centers have signed up to the government’s strategy on global tax transparency, marking a turning point in the fight against tax evasion and illicit finance.Following the recent leadership shown by the Cayman Islands, the other Overseas Territories of Anguilla, Bermuda, the British Virgin Islands, Montserrat and the Turks and Caicos Islands, have agreed to much greater levels of transparency of accounts held in those jurisdictions. They have agreed to pilot the automatic exchange of information bilaterally with the UK and multilaterally with the G5, comprising of the UK, France, Germany, Italy and Spain.
Under this agreement much greater levels of information about bank accounts will be exchanged on a multilateral basis as part of a move to a new global standard. The agreement will mean that the UK, along with other countries involved in the pilot, will be automatically provided with 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 and well as information on certain accounts held by entities, such as trusts.
The Isle of Man, the first non US jurisdiction to agree to greater exchange of information with the UK, has also agreed to join the multilateral initiative and Gibraltar, which already operates the relevant transparency directives as part of the European Union, has also made the same commitments. These jurisdictions have also committed to taking action to ensure they are at the forefront of transparency on company ownership. The government is working closely with them ahead of the UK’s presidency of the G8. Earlier this year Prime Minister David Cameron identified tax transparency as a key priority for the summit. This represents a step change in the level of international transparency and will make it much harder for people to escape paying taxes by hiding their money overseas. Osborne has urged others to join this growing initiative.
‘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,’ he said. The agreements build on those the UK reached with the Isle of Man, Guernsey and Jersey to exchange tax information automatically based on a ground breaking automatic information exchange agreement with the US to implement the US FATCA law to tackle tax evasion. The UK government sees this as setting a new standard in international tax transparency.
Winston Wambua
International Offshore Specialist
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