According to The Royale Gazette, the agreement was signed yesterday by the island’s minister of finance Bob Richards and UK treasury minister David Gauke.
In its story, the Gazette quoted a Bermuda Ministry of Finance press release as explaining that because the agreement was a "Model 2" IGA rather than a Model 1, it was reciprocal, meaning that "all Bermuda’s financial institutions must identify all UK residents with interests in Bermuda, and automatically report them to HM Treasury on an annual basis".
After receiving information on these UK residents with Bermuda interests, HM Treasury would then "be able to issue group requests for information in relation to recalcitrant clients of Bermuda financial institutions," it noted.
As reported, the so-called “UK FATCA” intergovernmental agreements were conceived in the wake of negotiations between the UK and the US on Britain’s signing up to the American Foreign Account Tax Compliance Act (FATCA), which takes effect mainly next year and obliges financial institutions in the UK to report to the US tax authorities, via a reporting channel set up via an intergovernmental agreement in the UK, on the assets and income of any American taxpayers they might have among their clients.
The Isle of Man was the first UK offshore jurisdiction to sign such a “UK FATCA”, which it did on 10 Oct, and was closely followed by Jersey and Guernsey twelve days later. The Cayman Islands followed suit on 5 Nov.
Gibraltar signed an IGA with the UK last week. Like the agreements with the Crown Dependencies and that of Bermuda, it is reciprocal, meaning that the UK will provide the same information to the jurisdicition that it is obliged to forward to the British tax authorities, according to a statement on HM Revenue & Customs’ website.
