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This article first appeared in the AIA Accountancy e-News, for more information click here.

The Isle of Man Government has today set a new standard in tax transparency by agreeing the main details of an automatic information exchange package with the UK.

The measures represent a closer form of tax cooperation with the UK based on the same principles as the FATCA agreement which the Isle of Man is negotiating with the USA. Under the arrangement the Isle of Man and UK Government will automatically share a wide range of financial information on their taxpayers, this information will be reported on an annual basis.

As part of the cooperation package the Isle of Man Government and HMRC today signed a Memorandum of Understanding establishing a disclosure facility for UK taxpayers to regularise their affairs, which will take effect from April 2013. The facility will give UK taxpayers a number of important assurances about what to expect after they first contact HMRC. Other measures announced today include the extension of the double taxation agreement between the Isle of Man and the UK to include the automatic exchange of tax information between the two countries.

In a statement issued today from HM Treasury, the Chancellor of the Exchequer said: "I welcome the progress made with the Isle of Man and look forward to working on this new standard in the automatic exchange of tax information."

The Isle of Man Treasury Minister, Hon Eddie Teare, MHK, said: "The Isle of Man has long made clear that it considers automatic exchange of information to be the emerging standard. This agreement with the UK is a well-considered next step in the Island's long-established policy of being at the forefront of tax transparency and international cooperation. I am pleased that the Chancellor of the Exchequer has recognised the important leadership the Isle of Man has shown.

"We have worked closely with UK Government on the design and implementation methods of this new model of tax information exchange. This swift agreement between our two Governments will help us respond to the problems of tax evasion with appropriate immediacy. Furthermore, it will provide confidence to international investors in the Isle of Man that they are dealing with a regime which complies to global standards of best practice."

This article first appeared in the AIA Accountancy e-News, for more information click here.