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UK signs tax deal with Guernsey and Jersey

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30th Oct 2013
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The government has signed agreements to automatically share tax information with Guernsey and Jersey as part of an effort to stop people hiding money offshore.

The new agreements mean that all the Crown Dependencies have now entered into automatic tax information exchange agreements with the UK, with the Isle of Man having signed on 10 October 2013.

As highlighted by Paul Eaves in his blog, the net is closing in on taxpayers trying to evade tax overseas, but for those wanting to come forward, beneficial disclosure regimes are still in operation.

All parties are committed to compliance with international standards of “transparency and exchange of information for tax purposes” and are supportive of improving tax compliance, according to the agreement.

The government said that it will sign further agreements with other jurisdictions as part of their commitment to combat tax evasion.

The Crown Dependencies (Isle of Man, Guernsey and Jersey) and the British Overseas Territories (the Cayman Islands, the British Virgin Islands, Bermuda, Anguilla, Turks and Caicos Islands, Montserrat and Gibraltar) have all agreed to enter into automatic tax information exchange agreements with the UK.

The automatic exchange of financial information between governments and tax authorities is helping to counter tax evasion, but there is room for improvement, according to a report by the Organisation for Economic Co-Operation and Development (OECD) in 2012.

The authorities in a taxpayer’s country of residence can use the information exchanged to check its tax records that taxpayers have reported their foreign income accurately. Information concerning the acquisition of significant assets may be used to evaluate the net worth of an individual.

Interest, dividends, royalties, income from dependent services and pensions are among the most frequently exchanged income types are the OECD’s report said.

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