THE CAYMAN ISLANDS has become the first British overseas territory to sign an automatic tax information exchange agreement with the UK.
Financial information on UK taxpayers with accounts in the Cayman Islands will be reported to HM Revenue & Customs automatically every year as part of the agreement.
The arrangement is in line with similar deals the UK struck with the Isle of Man, Jersey and Guernsey in October. On the current timetable, UK residents with assets concealed on the island will have until September 2016 to disclose details to the taxman and pay any tax owed to the HMRC, as well as a fine between 10% and 20%. While in most cases, the deal will see evaders escape prosecution, HMRC offers no guarantees.
Additional information including data relating to companies and trusts will be shared after 2016.
The Cayman Islands have also agreed to be part of the G5 multi-lateral information sharing pilot. Initially agreed between the UK, France, Germany, Italy and Spain, the Cayman Islands will join these countries in automatically exchanging information about bank accounts held by taxpayers from their jurisdictions.
CIoT European representative and Kinetic Partners member Gary Ashford said: “The agreement with Cayman is an important milestone. This is the first overseas territory to sign such an agreement and I would now expect other overseas territories to follow.
“We are now entering a new phase of tax transparency.”
Chancellor George Osborne said: “Alongside the significant investment that the government has made in HMRC’s anti-avoidance and evasion work, these agreements will help them to clamp down further on those individuals who seek to hide their assets offshore.
“Our message is very clear: it is only fair that people pay the tax they owe. If you are trying to evade tax, we are coming after you.”