The UK and Gibraltar governments have agreed to automatically share tax information to make it harder for people to evade tax.
It follows similar agreements with 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).
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.
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, the OECD report said.