The UK has signed an agreement with the Isle of Man to clamp down on those who choose to hide their money offshore.
Signed Thursday 10 October, the agreement with the Isle of Man is the first ever automatic tax information exchange agreement based on FATCA (the US Foreign Account Tax Compliance Act) to be signed between two parties of which neither are the US.
This is a significant move towards a new global standard in the automatic exchange of tax information, which will provide a step change in the international community’s ability to clamp down on those hiding assets offshore to evade tax.
The government will look to sign further agreements with other jurisdictions as soon as possible and is currently in discussions with the rest of the Crown Dependencies and the Overseas Territories.
A wide range of financial information on UK taxpayers with accounts in the Isle of Man will now be reported to HMRC automatically each year. This will significantly enhance HMRC’s ability to close in on those who do not declare their offshore affairs.
Chancellor George Osborne has welcomed the signing, commenting:
The agreement we have now signed with the Isle of Man is a momentous step forward in tax transparency, showing that when we work together we can push the international agenda forward.
The Isle of Man should be recognised as the first jurisdiction to sign an agreement of this kind with the UK.
For anyone attempting to hide their money offshore our message is clear: our resolve is stronger than ever, the net is closing in and the world is becoming a smaller place to evade paying the taxes which are owed.
Chief Minister of the Isle of Man Allan Bell said:
In signing this historic agreement with the United Kingdom we are underlining the message to our neighbours and the wider world that our Island is a responsible centre for top quality international business.
The Isle of Man has led the way in the field of international tax co-operation and we are pleased to be playing our part in the development of a new global standard in automatic information exchange.
Photo by guitarfish on Flickr. Used under creative commons.