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UK, IoM To Sign Enhanced TIEA

Tuesday, December 11, 2012

The UK and the Isle of Man are developing a package of measures designed to combat tax evasion which includes an enhanced tax information exchange agreement (TIEA).

The deal will mean that a range of additional information about potentially taxable income held in Isle of Man bank accounts will become available to the UK government. Under the agreement, the UK and Isle of Man will automatically exchange a wide range of information on tax residents, on a reciprocal basis.

The new TIEA will follow, as closely as practicable, the "UK-US Agreement to Improve International Tax Compliance and to Implement FATCA," signed in September. It will be concluded to the same timetable as the agreement currently being negotiated between the Isle of Man and the US.

FATCA was enacted by the US Congress in March, 2010. It is intended to ensure that the US tax authorities obtain information on financial accounts held by US taxpayers, or by foreign entities in which US taxpayers hold a substantial ownership interest, at Foreign Financial Institutions (FFIs) including banks, investment funds, insurance companies, foreign trusts and foreign corporations.

FFIs are required to enter into agreements with the US Internal Revenue Service and Treasury, to provide such details. Failure by an FFI to disclose information would result in a requirement to withhold 30% tax on US-source income.

The Isle of Man TIEA comes as the UK seeks to up the ante in its crackdown on tax evasion. The Chief Ministers of Jersey and Guernsey last week confirmed that negotiations are to proceed between the Crown Dependencies and the UK with the aim of creating a similar framework envisaged by the US version of FATCA.

An exploratory meeting was held with HM Treasury officials, with the ministers signaling their "common commitment to combat tax evasion and to participate generally in international efforts to combat financial and other crime including fiscal crime."

HM Revenue and Customs (HMRC) is also set to receive GBP77m in new funding from the Treasury to help it crack down on offshore evasion and avoidance by wealthy individuals and by multinationals.

According to the Treasury, this should result in an additional GBP2bn per year in tax that it says would have otherwise gone unpaid. Additional staff and legal support will be given to HMRC to speed up its work in identifying and challenging multinationals’ transfer pricing arrangements, and to further strengthen HMRC's risk assessment capability across the large business sector. The aim is to ensure that multinationals do not shift profits out of the UK and therefore pay the tax due in accordance with UK tax law.

Exchequer Secretary to the Treasury, David Gauke said of the TIEA: “This agreement will significantly boost the UK’s ability to tackle cross-border tax evasion. Automatic information exchange is an important tool in boosting HMRC's ability to clamp down on those who seek to hide their money overseas. Our ground breaking agreement with the US sets a new standard in international tax transparency and [the] agreement between the UK and Isle of Man to move to much greater levels of automatic exchange is the next step in this process.

“For years people said this couldn’t be done, so I welcome the progress we have made so far with the Isle of Man. We are looking to reach similar agreements with other jurisdictions and are in discussions with Jersey and Guernsey about enhanced information exchange as part of our common commitment to combat tax evasion," Gauke added.

Isle of Man Chief Minister Allan Bell said: "As a small International Business Centre, the Isle of Man seeks to work in partnership with our key economic allies to compete for global business. It is therefore essential that we also work together to achieve international standards of regulation. By clarifying our intentions, we can give business confidence about our direction of travel, so that together we can build a sustainable future for the Island’s economy."

"We will be working closely with our Isle of Man-based businesses and the UK government to ensure measured and cost-effective implementation of this agreement. I look forward to announcing further details of how we are achieving this over the coming weeks," Bell added.

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The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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