The Cayman Islands (formerly considered to be a notorious tax haven) this month became the first British Overseas Territory to sign an automatic Tax Information Exchange Agreement with the United Kingdom: in what is believed to be the first of several more to come; as the would-be tax dodgers’ world shrinks further.
The deal with The Cayman Islands (known as a TIEA) is very similar to the taxman’s recent arrangements with the Isle of Man, and the Chanel Islands of Jersey and Guernsey. British residents with assets on the islands have until September 2016 to make a disclosure to HM Revenue & Customs on preferential terms, and pay any additional tax, interest and penalties (usually of 10% or 20%). From then on financial data on UK residents with accounts in the islands, plus information regarding companies and trusts, will be reported to HMRC automatically. Anyone with undisclosed tax liabilities who hasn’t come forward and made a voluntary disclosure before then would face significantly higher penalties, and possibly criminal prosecution.
The Cayman Islands are a British Overseas Territory in the western Caribbean Sea (south of Cuba and northwest of Jamaica), comprising of 3 islands: Grand Cayman; Cayman Brac; and Little Cayman.
The Cayman Islands have also agreed to be part of the pilot G5 multi-lateral information sharing initiative – which already includes the UK, France, Germany, Italy and Spain. These countries will automatically exchange information within the group about bank accounts held by citizens of the other group members.
The Chancellor of the Exchequer said: “These agreements clamp down further on those individuals who seek to hide their assets offshore”.
Lynam Tax partners have a vast amount of practical experience in managing tax investigations and tax enquiries. We can advise you on the best course of action and if appropriate, help you manage any necessary disclosures, in order to obtain the optimum outcome for you, your business and your family.
*For a free, private, no obligation consultation, call Paul Lynam today on 0845 643 9997
or Andrew Nutbrown on 07718 778710