In his Budget speech delivered to the Manx parliament today, treasury minster Eddie Teare gave an update on FATCA negotiations with the US, which he said are “progressing well”, and went on to give a more detailed breakdown of the government’s previously announced plans to increase its tax ties with the UK.
Bell said it plans to form a closer form of tax cooperation based on the same principles as FATCA with the UK and said the new agreements will be put in place “shortly”.
Specifically, Bell said the agreement will result in Manx financial institutions providing a broad range of information on the investments of UK resident taxpayers, which will then be shared automatically with the UK by the IoM tax authorities.
Bell added that the main body of the agreement has already been agreed at “officer level” and that both governments will work together to “minimise the burden on those businesses affected by the new system, and to ensure that detailed guidance is published as soon as possible”.
Neil Chadwick, technical manager at IoM-based Royal London 360°, said the agreement demonstrates the island’s commitment to international tax compliance and “can only be a good thing for companies operating from the jurisdiction”.
“Any UK crown dependency or overseas territory who thinks that they will not have to enter into a similar type of agreement with the UK in due course are quite frankly deluding themselves,” he added. “This is the way the world is going and I can see these types of agreements becoming more common place, eclipsing things like the intended revisions to the EU Savings Tax Directive.
Isle of Man disclosure facility
Bell also said there will be an extension of the existing double taxation agreement between the two jurisdictions and, interestingly, that a memorandum of understanding has been signed between the Manx government and HMRC under which a “bespoke IoM disclosure facility for UK taxpayers wishing to regularise their tax affairs” will be opened in April.
“Following the success of the Liechtenstein Disclosure Facility, the IoM Disclosure Facility could result in new business flows to the IOM by UK tax resident individuals/entities looking to ‘regularise’ their UK tax affairs at significantly lower costs,” said Chadwick.
