Crown Dependencies Fear That UK Will Push For Information Exchange Despite Savings Tax Directive

by Robin Pilgrim, LawAndTax-News.com, London

08 August 2003

Banking experts in the Channel Islands and the Isle of Man fear that despite having agreed to impose a withholding tax under the terms of the EU's Savings Tax Directive, the UK's Crown Dependencies will come under pressure from the United Kingdom to exchange tax information.

Reporting this week, the Portfolio International news service revealed that senior figures in the finance sectors of both Jersey and Guernsey believe that the UK will attempt to exert pressure when the jurisdictions come to re-negotiate tax treaties with it in 2004. Discussions on this topic are scheduled to take place between the Isle of Man and the UK later this year.

Speaking to PI, president of the Association of Licensed Banks in the Isle of Man, Sean Dowling explained that:

'We anticipate that the UK, which was never happy with the withholding tax route, would be pushing the Crown Dependencies for a greater sharing of information.' He went on to add that:

'There were mixed opinions in the Isle of Man about which way to go, but it is fair to say that it would be confusing, having chosen withholding tax, to go down another route for another jurisdiction. Yet, as we all said, we would be quite happy to move forward if there were a real level playing field.'

Questioned by the news service as to whether the UK would indeed be pushing for greater information exchange with its dependencies despite the agreement reached by European Union members on this issue, a spokesman for the Inland Revenue announced that:

'The UK has always made it plain that in principle we regard the exchange of information, on as wide a basis as possible, as the most appropriate way forward.'

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