Every crown dependency with a significant financial centre has entered an information-sharing/disclosure arrangement with the UK government. We can help you determine what this means for you and advise you confidentially on the right course of action.
In February 2013, HMRC entered into a disclosure arrangement with the government of the Isle of Man. Similar agreements have subsequently been reached with the governments of Guernsey and Jersey.
All three agreements provide for an exchange of financial information with HMRC and a disclosure facility to enable UK taxpayers to regularise their UK tax affairs.
The disclosure facilities closed with effect from 31 December 2015 and it is no longer possible to make a voluntary disclosure of tax irregularities using these arrangements. However it is important to remember that these jurisdictions will still be exchanging financial information with HMRC. Therefore taxpayers with undeclared assets in these territories should consider coming forward to make a voluntary disclosure to HMRC. A voluntary disclosure can result in significantly lower penalties being charged than would be the case if HMRC get in first. Our team of investigation specialists can advise further on what options are available to you.
The UK government has also entered into automatic information-sharing agreements with all the British Crown Dependencies that contain significant financial centres. All of these territories have agreed treaties and will pilot an automatic exchange of information with the UK:
- the Cayman Islands;
- the British Virgin Islands;
- Montserrat; and
- the Turks and Caicos Islands.
Again taxpayers with undeclared assets in these countries should consider coming forward and making a voluntary disclosure before HMRC use the information they receive under these information sharing arrangements to open their own enquiries.
Looking ahead, the UK government is party to the OECD common reporting standard which will see large amounts of financial data being automatically exchanged between participating countries. HMRC will have even more data and information about a taxpayer’s foreign assets at their disposal and will use this information to investigate taxpayers.
Following changes made in recent Finance Acts, HMRC can charge significantly higher penalties where tax liabilities arise on previously undisclosed foreign assets or where assets are moved from one foreign jurisdiction to another with the main intention of trying to avoid UK taxation.
In addition where a taxpayer has not fully declared their taxable offshore income and gains, HMRC will also soon have in their powers the use of the strict liability criminal offence of failing to declare taxable offshore income and gains, and a requirement for a taxpayer to correct their tax return where they have undeclared offshore tax liabilities. Failure to make the correction will result in significant financial penalties.
If you would like to discuss your circumstances in complete confidentiality, please call us now on +44 (0)800 032 8374.