The UK government is planning to impose a version of the US Foreign Account Tax Compliance Act (FATCA) on its Crown Dependencies and Overseas Territories, according to a leaked document seen by International Tax Review. ‘The move will deal an almost-fatal blow to tax evasion through the UK’s tax havens,’ ITR editor Salman Shaheen wrote today.
The development will be welcomed by many tax professionals. Some commentators have suggested that governments and campaigners have paid too little attention to illegal tax evasion and overstated the impact of legal tax avoidance.
Salman said: ‘The move will come as a huge blow to tax havens and companies and individuals hiding money in them. But it is a coup for the Tax Justice Network (TJN), which has long been arguing for automatic information exchange.’
The government has said in response to a recent report of the International Development Committee that it does not regard the introduction of a FATCA in the UK as ‘an appropriate means’ to tackle tax evasion. ‘FATCA is unilateral and extraterritorial in its approach and has created significant difficulties for the US as well as affected countries in its implementation,’ the government said. The IDC had recommended legislation ‘requiring tax authorities automatically to exchange information relating to UK citizens or corporations’.
However, Shaheen reported that ‘in private’ the government has already drafted FATCA legislation to be imposed on its Crown Dependencies and Overseas Territories, including the tax havens of the Cayman Islands, the Channel Islands and the Isle of Man.
‘The draft agreement, seen by International Tax Review, will require the automatic exchange of information for each reportable account of each reporting financial institution. That will include full details of all beneficial owners of the account, including those whose identities might otherwise be hidden by trusts or companies,’ he wrote.
George Osborne is set to deliver his autumn statement on 5 December. Shaheen said ITR expected the legislation to come into effect in January 2014, adding that HM Treasury declined to comment but ‘said that it is assisting the Crown Dependencies and Overseas Territories in their response to FATCA’.
The UK government is planning to impose a version of the US Foreign Account Tax Compliance Act (FATCA) on its Crown Dependencies and Overseas Territories, according to a leaked document seen by International Tax Review. ‘The move will deal an almost-fatal blow to tax evasion through the UK’s tax havens,’ ITR editor Salman Shaheen wrote today.
The development will be welcomed by many tax professionals. Some commentators have suggested that governments and campaigners have paid too little attention to illegal tax evasion and overstated the impact of legal tax avoidance.
Salman said: ‘The move will come as a huge blow to tax havens and companies and individuals hiding money in them. But it is a coup for the Tax Justice Network (TJN), which has long been arguing for automatic information exchange.’
The government has said in response to a recent report of the International Development Committee that it does not regard the introduction of a FATCA in the UK as ‘an appropriate means’ to tackle tax evasion. ‘FATCA is unilateral and extraterritorial in its approach and has created significant difficulties for the US as well as affected countries in its implementation,’ the government said. The IDC had recommended legislation ‘requiring tax authorities automatically to exchange information relating to UK citizens or corporations’.
However, Shaheen reported that ‘in private’ the government has already drafted FATCA legislation to be imposed on its Crown Dependencies and Overseas Territories, including the tax havens of the Cayman Islands, the Channel Islands and the Isle of Man.
‘The draft agreement, seen by International Tax Review, will require the automatic exchange of information for each reportable account of each reporting financial institution. That will include full details of all beneficial owners of the account, including those whose identities might otherwise be hidden by trusts or companies,’ he wrote.
George Osborne is set to deliver his autumn statement on 5 December. Shaheen said ITR expected the legislation to come into effect in January 2014, adding that HM Treasury declined to comment but ‘said that it is assisting the Crown Dependencies and Overseas Territories in their response to FATCA’.
