On 26 June 2013, HMRC published a discussion document relating to the UK’s implementation (through regulations and guidance) of agreements with the British Crown Dependencies (CDs) to improve international tax compliance. The document distinguishes between CDs (the Isle of Man, Guernsey, and Jersey) and British Overseas Territories (OTs) with financial centres (Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Montserrat, and the Turks and Caicos Islands). As agreements with CDs will be fully reciprocal, domestic UK legislation will be necessary. Agreements with OTs will not be reciprocal and therefore domestic UK legislation will not be required. The discussion document is accordingly concerned solely with agreements between the UK and CDs.
The model agreement published alongside the discussion document is based on the 2012 UK/ USA enhanced automatic tax information exchange.
In essence, the agreements will require relevant UK financial institutions to provide the necessary information to HMRC under UK law. HMRC and its CD counterparts will then automatically exchange information under existing exchange of information provisions contained in relevant Tax Information Exchange Agreements or Double Taxation Agreements. UK financial institutions will be required by the agreements to identify and report details of accounts held by “Specified CD Persons”.
Comments are invited by 6 September 2013.
For the discussion document click here.