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Cayman Islands signs disclosure agreement

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The Cayman Islands has become the first overseas territory to sign a FATCA-style intergovernmental agreement with the UK for automatic exchange of information for tax purposes. Agreements have already been signed with the UK’s Crown dependencies: Jersey, Guernsey and the Isle of Man.

Reg Day, tax director at Pinsent Masons, noted: ‘The new reporting requirements are very broadly drawn and will require financial institutions in the Cayman Islands to automatically report information to HMRC regarding offshore investments in existence on or after 30 June 2014 which are held by UK resident individuals, partnerships and companies. The rules will also apply to offshore trusts and companies to the extent that there are UK-resident settlors, beneficiaries or beneficial owners. The exchange of information in respect of the calendar years 2014 and 2015 must be completed by 30 September 2016, and it is anticipated that HMRC will receive a mountain of information which will inevitably lead to some criminal prosecutions and numerous civil investigations.’