All three of the crown dependencies, Guernsey, Jersey and Isle of Man have now entered into agreement with HMRC which is the latest in the UK tax authorities’ no safe havens anti tax avoidance strategy which it is estimated will help them recover up to £1 billion from these three jurisdictions alone.
The basic structure of the agreement uses the usual carrot and stick approach. As with the Lichtenstein and Switzerland agreements the carrot is favourable treatment if you confess to holding undeclared assets when you will be hit by way of fixed penalty fines. In this particular case HMRC will operate a fixed penalty process with no definitive immunity from prosecution and the facility will last until the end of September 2016. The stick of course is the significant prospect of investigation and prosecution by HMRC once automatic exchange of information comes into place with the likelihood that a worldwide asset investigation will be made.
The point of course is that this is just another in a long line of initiatives by onshore authorities to pressure so called tax havens into disclosing information about bank accounts, offshore trusts and companies held by individuals in those jurisdictions. Whilst this particular ruling initially impacts on UK taxpayers the recent exchange of information agreement signed between the major European governments means that even if you have exited the UK the information is likely to find its way into the databank of Hacienda with all the unwanted attention that that might bring.
The message is loud and clear. It is no longer safe to hold undisclosed assets whether in a personal name or in the name of a trust or company in any jurisdiction and expect these not to come to the attention of the authorities somewhere down the line with all the likely consequences that this might have.
Of course the situation is compounded here in Spain by the fact there is a legal obligation to report annually offshore assets where these exceed 50,000 Euros with significant penalties for non reporting or miss-reporting of any information.
Source – Fiduciary Wealth Management Limited
