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Jersey Agrees UK FATCA Package

by Jason Gorringe,, London

21 March 2013

The Jersey Government has joined the Isle of Man in announcing that it has agreed a package of tax measures with the United Kingdom to share tax information on an automatic basis.

Following consultations with the island's finance industry, Jersey announced an agreement with the UK Government on March 20, 2013, which it says reflects the territory's special relationship with the UK and its long-standing commitment to join in the global action to combat tax evasion. Guernsey, too, has committed to entering into similar arrangements with the United Kingdom.

The package agreed by Jersey with the UK comprises:

  • The main body of an intergovernmental agreement (IGA) that closely follows the Foreign Account Tax Compliance Act (FATCA) IGA, which the island is negotiating with the US (aside from the jurisdiction specific annexes);
  • An alternative reporting arrangement for UK residents who are categorised as non-domiciled for tax purposes (res non-doms) which will be included in an annex to the IGA and which will be finalized to the same timetable as the IGA currently being negotiated with the US; and,
  • A disclosure facility, full details of which will be published shortly, which will allow investors with assets in Jersey to come forward and regularise their past tax affairs prior to information on their accounts being automatically exchanged.

In addition to the package, the UK has indicated that it is happy to consider the possible renegotiation of the two territories' current double tax agreements.

Announcing the deal, Jersey Chief Minister, Ian Gorst said: “We have a centuries-old special relationship with the UK and this package puts beyond doubt our long-held commitment to ensuring that the island is not used for tax evasion by UK resident taxpayers."

"Our internationally recognized reputation for being transparent and well regulated is a key strength of our financial services sector, and what we have now agreed with the UK will serve to further reinforce this message. It is also in the island’s long-term interests to keep in step with the global direction of travel towards greater transparency.”

Jersey Finance, the promotional agency for the island's financial services industry, pointed out that the package, which is consistent with those agreed by Guernsey and the Isle of Man, clearly reflects Jersey's political objective to remain closely aligned to the UK and to act as a leading participant in the development of standards to combat tax evasion.

Heather Bestwick, Deputy CEO of Jersey Finance, said: “The outline package agreed between Jersey and the UK is largely as expected, and, as noted by Gorst, reflects Jersey’s strong relationship with the UK and the island’s international reputation for high standards of regulation. The extensive consultation process that we ran on behalf of government with our member firms raised a number of points that will be important to capture in the detail of the final agreement and we are encouraged to see that there is reference to jurisdiction specific annexes forming part of the intergovernmental agreement (IGA).”

“One of the key benefits of this announcement is the degree of certainty that it offers the industry and our focus from this point forward will be to continue to work closely with government on the detail of each element of the agreed package and to support our members in quickly and clearly communicating these measures to Jersey’s global financial services client base.”

TAGS: individuals | Isle of Man | compliance | Finance | tax | business | offshore confidentiality | tax information exchange agreement (TIEA) | double tax agreement (DTA) | tax compliance | tax avoidance | banking | financial services | Guernsey | Jersey | United Kingdom | offshore | banking secrecy | standards | regulation | services

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