A new Tax Information Exchange Agreement (TIEA) between the UK and Guernsey came into force 27th November 2009, radically amending the 1952 arrangement. Guernsey includes the islands of Guernsey, Alderney and Herm.

The Financial Secretary to the Treasury, said: “This new tax information exchange agreement represents a significant step in our efforts to counter and prevent tax evasion and avoidance.”

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.

This is the 4th comprehensive TIEA signed by the UK; the others are with Bermuda, the Isle of Man and the British Virgin Islands (BVI).

The TIEA means that the UK and Guernsey can pass over information they already hold.  It also means that a UK Tax Inspector can get the Guernsey taxman to actively obtain further information (e.g. witness depositions, copies of original records) .  This includes information held by or regarding:

• Guernsey Banks, other financial institutions, and any person;
• Nominees and trustees, acting in an agency or fiduciary capacity;
• The ownership of Guernsey 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 Guernsey trusts: information on settlors, trustees, protectors and

beneficiaries;

• in the case of 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 Guernsey banks by UK residents.  Anyone with such an account who does not disclose under the 2009 Tax Amnesty – New Disclosure Opportunity could face a tax investigation. This TIEA means that the UK tax investigators will be able to obtain information and records from Guernsey 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. You may be worried about offshore assets or offshore bank accounts or may want more information about the 2009 Tax Amnesty – New Disclosure Opportunity or Liechtenstein Disclosure Facility. Lynam Tax Enquiry Experts have vast experience of dealing with tax enquiries, disclosures and disputes regarding offshore bank accounts, assets and structures, and assisting clients to the optimum outcome.  Phone today for a no obligation, confidential discussion.  Call Paul Lynam on: 0845 643 9997.