UK territories commit to tackle tax evasion

By added on 09/05/2013

All British Overseas Territories running financial centres have signed up to the UK government’s strategy on global tax transparency. Chancellor of the Exchequer George Osborne says the move marks a turning point in the fight against tax evasion and illicit finance, reports IFA Online.

The agreement now signed by Anguilla, Bermuda, the British Virgin Islands, Montserrat and the Turks and Caicos Islands pledging much greater levels of transparency of accounts held in their jurisdictions, follows the lead taken by the Cayman Islands. While Gibraltar already operates the relevant transparency directives as part of the EU, it, too, has made the same commitments as a British Overseas Territory.

This agreement means all Territories will pilot the automatic exchange of information bilaterally with the UK and multilaterally with the G5 - the UK, France, Germany, Italy and Spain. What’s widely expected in practice is much greater levels of information about bank accounts will be exchanged on a multilateral basis.

Andrew Watters Director with law firm Thomas Eggar confirms that the agreements will be in two parts: the duty of the financial institutions to provide client details and an opportunity for clients to make a voluntary disclosure to bring their tax affairs up-to-date.

“There are a number of ways of making such a disclosure,” he says. “If you get it wrong it will, at best, cost you more money than it should.  At worst, you could end up in prison. People need to get advice on what their position is, how worried they should be, how best to rectify past problems, and how best to move forward....”