Isle of Man first to sign UK FATCA

GPs domiciled on the island will need to submit tax information on any UK-based LPs or face tax penalties from UK authorities.

The Isle of Man became the first British dependency to sign an agreement 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.

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 Isle of Man’s agreement was signed in London on Friday by chief minister Allan Bell and HM Treasury Exchequer Secretary David Gauke.

“We have a long-established policy of complying with global standards, and we saw some time ago that enhanced automatic exchange of information on the FATCA model was becoming the new global standard in tax transparency,” Bell said in a statement.

The two governments agreed to start exchanging FATCA-style information from 2016. UK tax authorities gave 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.