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UK and Isle of Man to sign enhanced tax information exchange agreement

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A tax information sharing agreement with the Isle of Man will provide HMRC with a range of ‘additional information’ about potentially taxable income in Manx bank accounts, HM Treasury announced last week.

‘This is part of a package of measures being developed by the UK and the Isle of Man as part of a shared commitment to combat tax evasion,’ the Treasury said.

The UK and Isle of Man will automatically exchange a wide range of information on tax residents, on a reciprocal basis. The agreement will follow ‘as closely as practicable’ the agreement signed by the UK and US in September on improving compliance and implementing FATCA, in order to minimise burdens on financial institutions.

It will be concluded to the same timetable as an agreement between the Isle of Man and the US.

The Financial Times noted that Allan Bell, chief minister of the Isle of Man, told the Manx parliament in October that the island needed to respond to a ‘fundamental shift in public opinion’.

David Gauke, the exchequer secretary, said last week: ‘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 today’s 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.’

Jersey and Guernsey said in a joint statement on 30 November that that they are in discussions with the Treasury on enhanced information exchange, the Treasury added.