Guernsey yields to UK on automatic reporting

18 March 2013

Guernsey has agreed to the automatic reporting of bank account information to the UK tax authorities.

The deal is not yet finalised, and has still to be considered by the island's parliament (the States). But it appears similar to that recently signed by the Isle of Man, in that non-doms with Guernsey assets will not be subject to the automatic disclosure provisions. Also, associated with the agreement there will be a comprehensive disclosure opportunity so that long-standing bank accounts can be declared with minimum penalties. The opportunity is expected to be open until September 2016, and those who decline to use it may be charged penalties of up to 200 per cent, according to some reports.

Guernsey has also agreed to negotiate a revised double taxation agreement with the UK.

The jurisdiction's Chief
Minister Peter Harwood said its future was best served by ‘safeguarding our position and reputation as a respected, well regulated, tax transparent jurisdiction.’ He noted that automatic information exchange with European countries already occurs in Guernsey under the EU Savings Directive, and will soon do so with the US in accordance with the Foreign Accounts Tax Compliance Act (FATCA). Harwood said he did not expect the disclosure facility for UK accountholders to be used much, ‘if at all’ given Guernsey's existing network of tax treaties and compliance with the EU Directive.

Treasury Minister Gavin St Pier stressed the importance of the non-dom exemption. ‘Securing a proportionate and workable non-dom reporting regime is clearly pivotal’, he said. ‘The arrangements we have negotiated are non-intrusive and respect non-doms' different status under UK tax laws.’ He expressed confidence that the exemption will secure Guernsey's attractiveness for non-dom business, ‘not least as they were devised in close consultation with industry groups and practitioners.’

Isle of Man Chief Minister Allan Bell welcomed the announcement, which he said was significant but not surprising. ‘Guernsey's proposed agreement with the UK seems to mirror ours, but by making our announcement three months ago we have given our finance sector an additional period of clarity and certainty about our direction of travel,’ he said.

All eyes now turn to Jersey, which has not announced plans to follow its Crown dependency rivals into automatic exchange. It has previously rejected the idea on the grounds that it would be thereby put at a competitive disadvantage against other international financial centres.

 

Sources

 

Guernsey government

Manx government

Guernsey Press

International Adviser

Citywire

 

 


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