A new Tax Information Exchange Agreement (TIEA) between the UK and Jersey came into effect 27th november 2009, radically amending the 1952 arrangement. It’s seen by the UK taxman as a crucial step in “combating tax avoidance and tax evasion”.
HMRC Chief Tax Inspector, Dave Hartnett, said: “The importance of this TIEA with Jersey should not be under-estimated. It will enable us to obtain the information we need to ensure that the days when putting assets off shore provided an unfair tax advantage are well and truly over.”
TIEAs allow governments to exchange information that may be relevant to the determination, assessment, enforcement or collection of tax; or to the investigation of tax matters, or the prosecution of criminal tax matters.
The UK already has TIEAs with Bermuda, the Isle of Man, the British Virgin Islands (BVI), and Guernsey: all of whom usually considered as tax havens.
The TIEA means that the UK and Jersey can pass over information they already hold. It also means that a UK Tax Inspector can get the Jersey taxman to actively obtain further information (e.g. witness depositions, copies of original records). This includes information held by or regarding:
- Jersey Banks, other financial institutions, and any person;
- Nominees and trustees, acting in an agency or fiduciary capacity;
- The ownership of Jersey companies, partnerships, collective investment schemes, trusts, foundations and other persons, including:
- information on all persons in an ownership chain; and
- in the case of collective investment schemes, information on shares,
units and other interests;
- in the case of Jersey trusts: information on settlors, trustees, protectors and
- in the case of Jersey foundations, information on founders, members of the
foundation council and beneficiaries; and
- in the case of persons that are not collective investment schemes,
trusts or foundations, equivalent information to the information above.
What does this mean for me?
HMRC have announced two tax amnesties: the New Disclosure Opportunity and the Liechtenstein Disclosure Facility; following the Offshore Disclosure Facility 2007. The UK taxman already has details of thousands of bank accounts registered with Jersey banks by UK residents. Anyone with such an account who does not disclose under the NDO or LDF (Tax Amnesty 2009) could face a Tax Investigation. This TIEA means that the UK tax investigators will be able to obtain information and records from Jersey to help in a tax enquiry. It is likely that these information powers will mainly be used by the specialist tax evasion investigators in Specialist Investigations, Civil Investigation of Fraud or Revenue & Customs Prosecution Office (RCPO).
If you or your clients are subject to a tax investigation you may need specialist help. Or if you have an offshore bank account or other assets in Jersey or other tax havens and you want to know more about The New Disclosure Opportunity or the Liechtenstein Disclosure Facility, call us. Lynam Tax Enquiry Experts have vast experience of dealing with tax enquiries and disclosures involving offshore accounts, assets and structures and in assisting clients to the optimum outcome. Phone Paul Lynam today for a no obligation, confidential discussion on: 0845 643 9997.