The Isle of Man has became the first Crown dependency to strike an information-sharing deal with Britain.  Treasury has confirmed that names and bank details of UK taxpayers on the island will be disclosed automatically to HM Revenue & Customs to flush out tax evaders.

In response to this, Andrew Watters, Director and tax specialist at leading national law firm Thomas Eggar LLP has released the following statement.

“The announcement is simply the latest example of the ongoing determination of the UK authorities, in collaboration with the Organisation for Economic Co-operation and Development (OECD), to ensure they know about assets held abroad by UK residents.  The Channel Islands, together with various other international financial centres, are under similar pressure.  Having identified the persons concerned, the taxman will examine their affairs to see whether there is avoidance or evasion. 

“Individuals who hold such offshore assets may wish to consider whether they are exposed to challenge.  Some, including non-domiciled individuals, may have an over-optimistic view of their tax position.  If there is an undisclosed liability, there are opportunities to gain advantageous terms by making a voluntary disclosure.

“The reference to having until 2016 to make a disclosure clearly links to the terms of the Liechtenstein Disclosure Facility which is open until 2016.  However, for anyone who is thinking of waiting, the danger is that if their name comes to the attention of the UK authorities before they make a voluntary disclosure, then the option of such a disclosure disappears and they can face substantial civil penalties or even criminal prosecution.”

Andrew Watters, Director, Thomas Eggar LLP