Posted by Nick Day on 21 Feb 2013
The UK Government announced on 19 February that it has agreed with the Isle of Man that it will automatically receive information on offshore bank accounts and investments held in the Isle of Man by UK taxpayers.
This “automatic exchange” of information between the two jurisdictions will be similar in style to the US FATCA (Foreign Account Tax Compliance Act) provisions implemented by the US to gather information on its own taxpayers with investments hidden offshore.
An Isle of Man disclosure facility will also be introduced to enable those with offshore accounts to proactively disclose and settle their affairs with HM Revenue & Customs (HMRC) before information on their investments is exchanged. The facility will come in to operation on 6 April 2013 and be in place until September 2016. It will provide an “amnesty” of sorts as it appears as though it will enable taxpayers to settle the tax due and limit the associated penalties to just 10% for the period 6 April 1999 to 5 April 2009 and to 20% for later years.
However, the disclosure facility will not be open to those who have previously been under enquiry with HMRC and there is no guarantee that criminal investigation will not apply.
The Isle of Man agreement will follow hard on the heels of the UK-Switzerland agreement that came in to force on 1 January 2013 and which has already raised £342M for the UK Government. Jersey and Guernsey are also negotiating similar agreements with the UK.
The clear message is that the UK Government will not be relenting in its efforts to track down those concealing taxable income and gains abroad.
Click here to go to the Treasury’s press notice.
Tax Innovations can help in every aspect of disclosing previously unreported offshore interests to HMRC.
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