There are rumours that the UK government is about to reveal legislation imposing automatic client disclosure provisions on financial institutions in the Crown Dependencies and British Overseas Territories.
The journal International Tax Review claims to have seen draft UK legislation imposing client disclosure provisions on financial institutions in the Crown Dependencies and the British Overseas Territories.
The draft, described as a UK version of the US Foreign Account Tax Compliance Act (FATCA), is said to mandate the automatic reporting of financial and beneficial ownership information for each account of each offshore financial institution to the UK’s HM Revenue and Customs.
A leaked government document seen by International Tax Review reveals that the UK is planning to impose its own version of the US Foreign Account Tax Compliance Act (FATCA) on its Crown Dependencies and Overseas Territories. The move will deal an almost-fatal blow to tax evasion through the UK’s tax havens.
Responding to an International Development Committee report earlier this week, the government publicly rejected the need for a UK version of FATCA, which would require tax authorities to automatically exchange information relating to UK citizens or corporations.
In private, however, the government has already drafted FATCA legislation which it will impose on its Crown Dependencies and Overseas Territories. These include some of the world’s most notorious tax havens such as the Cayman Islands, the Channel Islands and the Isle of Man. The draft agreement, seen by International Tax Review, will require the automatic exchange of information for each reportable account of each reporting financial institution. That will include full details of all beneficial owners of the account, including those whose identities might otherwise be hidden by trusts or companies.
It will also require the account number, name and identifying number of the reporting financial institution as provided when registering with the IRS for FATCA purposes, and the account balance or value as of the end of the relevant calendar year or other appropriate reporting period or, if the account was closed during such year, immediately before closure.
The UK Treasury declined to comment, but said that it is assisting the Crown Dependancies and Overseas Territories in their response to FATCA.
Quoting Tax Campaigner Richard Murphy, the Observer newspaper says the UK government will force other jurisdictions to comply by threatening to veto their own FATCA agreements with the US. Most international financial centres are anxious to comply with FATCA, because the US Treasury plans to impose a 30 per cent levy on all payments from US sources to non-compliant foreign financial institutions.
The evidence is now clear: the writing is on the wall for secrecy in the UK’s tax havens. There are now two options for those hiding their funds in these locations. The first is to own up now. That’s the wise option. It’s the only safe option. The alternative is to flee. My suspicion is that it’s already too late for that to work.
FATCA Problems??? Have a Foreign Bank Account???
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