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The UKs very own FATCA
20/06/2014

UK Crown Dependencies and British Overseas Territories


The UK and the Crown Dependencies, comprising Jersey, Guernsey and Isle of Man, plus Gibraltar, have signed reciprocal Intergovernmental Agreements (IGA’s) for the mutual exchange of information by financial institutions on accounts held by residents in the other jurisdiction. A financial institution in the Crown Dependencies and Gibraltar is from now on obliged to provide data to the UK on accounts held by UK residents.

The effect of the IGA can be summarised as follows:

A. Mutual automatic exchange of information on UK residents holding accounts in the Crown Dependencies and Gibraltar, and those residents of the Crown Dependencies and Gibraltar who hold accounts in the UK.

B. An alternative regime for UK residents who are UK non-domiciled individuals.

C. A disclosure facility will be put in place to allow for the voluntary disclosure of information to the UK tax authorities, HMRC.

Similar IGA’s have also been signed between the UK and the Overseas Territories, however, these IGA’s are on a non-reciprocal basis, for the provision of data to the UK on accounts held by UK residents.

The accounts affected by the IGA’s, are all offshore accounts in these jurisdictions held by UK residents, as well as offshore companies and trusts with UK resident settlors, beneficiaries or beneficial owners.

The financial institutions affected by these IGA’s must provide disclosure for the calendar year to 31st December 2014, by 30 September 2016. The information provided will be basic information to identify the account, the individual account holder and the end of year account balance.

For the calendar year to 31st December 2015, additional information must be provided on the revenue received on the accounts and for the year to 31st December 2016 further details including the total gross proceeds received on the account are to be provided. 

The IGA’s entered into with the Crown Dependencies provide for the voluntary disclosure to HMRC of undeclared assets held by financial institutions before automatic disclosure takes effect. The period covered by the disclosure facility covers the period from 1st April 1999.

There are a number of limited exemptions. Accounts held by individuals with a balance of less than USD50,000 and accounts in the name of entities with a balance of less than USD250,000, are not required to be reported.
UK Crown Dependencies and Transparency

In a separate move toward tax transparency, the UK Government published last year an Action Plan for the establishment of a central registry of corporate beneficial ownership by the Crown Dependencies and Territories. It was proposed that the registry would be open to public inspection.

The UK Prime Minister has now approached the Crown Dependencies with a request to commence discussions on the possible disclosure of information on the beneficial ownership of companies located in their jurisdictions and the collection of the information into a central registry. Such a system would be intended to work in conjunction with the exchange of information agreements that have recently been implemented. In a rare step, the Prime Minister, at the same time, took the opportunity to express his support for the offshore financial centres.

Of the Crown Dependencies, the Channel islands currently maintains information on the beneficial ownership of companies and the Isle of Man also has existing procedures to confirm the beneficial ownership of companies.