The UK and British Virgin Islands (BVI) recently signed a tax agreement mirroring those signed under the US’ Foreign Accounts Tax Compliance Act (FATCA). The scheme, dubbed by some commentators “son-of-FATCA”, requires GPs with funds domiciled in British overseas territories and crown dependencies to report tax information on UK account holders to UK tax authority HMRC.
In signing the agreement, the BVI followed the lead of the Cayman Islands, Guernsey, Jersey and the Isle of Man, which all signed UK FATCA deals last year.
Like those other jurisdictions, the BVI signed a “Model I” agreement that allows local tax authorities to submit information on GPs’ behalf. Under a “Model II” agreement, GPs would need to engage directly with HMRC.
Fund managers subject to UK FATCA have until May 31 2016 to supply 2014-2015 tax information on their UK investors. Only UK LP tax information recorded on or after 30 June 2014 will be subject to reporting, meaning LPs' 2013 tax information will not need to be submitted, according to HMRC.
Other domiciles that have yet to sign mandatory UK FATCA-style agreements include the Anguilla, Bermuda, Gibraltar, Montserrat and the Turks and Caicos Islands.