Channel Island domiciles Jersey and Guernsey have signed agreements with the UK that will provide HM Treasury more tax information on overseas accounts owned by UK citizens. The bill mirrors the US’ Foreign Accounts Tax Compliance Act (FATCA).
Under the UK’s scheme (dubbed by some commentators “son-of-FATCA”) GPs with funds domiciled in British overseas territories and crown dependencies, such as Guernsey, Jersey and the Isle of Man, must comply with the law.
UK tax authorities have given Channel Island-based GPs until May 31 2016 to supply 2014-2015 tax information on their UK LPs to local tax authorities. 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 reported, according to HMRC.
Guernsey and Jersey follow the Isle of Man which signed a UK FATCA agreement earlier this month.
Other domiciles that must sign UK FATCA-style agreements include the Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Montserrat and the Turks and Caicos Islands.
The agreements were signed in London on Tuesday by Guernsey Chief Minister Peter Harwood, Jersey Chief Minister Ian Gorst and HM Treasury Exchequer Secretary David Gauke.
“From an industry perspective, we know there is work to be done in the coming months to ensure we meet the operational requirements of the UK [FATCA agreement]. However, the agreement will also help to strengthen our reputation in key markets abroad,” said in a statement Geoff Cook, chief executive of Jersey Finance.
The governments agreed to exchange tax information under a ‘Model I’ intergovernmental agreement.
Model I allows Channel Island-based fund managers to report tax information to local officials, who can relay that information on their behalf to HMRC. Under a “Model II” arrangement, GPs would report directly to HMRC.