15 April 2013

Memorandum of understanding between Guernsey and HMRC - disclosure facility

A Memorandum of Understanding was signed on 11 March 2013 between Guernsey and HMRC relating to co-operation in tax matters ("MoU") and published by HMRC and the States of Guernsey on 9 April 2013.

The MoU is part of the tax package of three initiatives announced on 15 March 2013 by the States of Guernsey in relation to Guernsey entering into an IGA with the UK for FATCA-based reporting.

Under the MoU, HMRC will make available from 6 April 2013 to 30 September 2016 a disclosure facility (including a bespoke service) to provide an opportunity for those who are eligible to bring their UK tax affairs up-to-date.  The disclosure facility can be used to make full disclosure of outstanding liabilities and settle amounts due, including paying interest and penalties within prescribed limits.  HMRC will not seek to recover from eligible participants any UK tax or penalties for the period prior to 6 April 1999 (for individuals) and 1 April 1999 (for legal persons).

Press Notice 9 April 2013

In a press notice issued on 9 April 2013, the States of Guernsey Income Tax said that the Director of Income Tax will shortly be notifying financial intermediaries in Guernsey that they should contact clients who may be able to take advantage of the terms of the disclosure facility.  These will be all current clients who are known to be "relevant persons" (as defined in the MoU) who at any time during the period between 6 April 1999 (for individuals) and 1 April 1999 (for legal persons) to 31 December 2013 have been resident in the UK for UK tax purposes (or incorporated in the UK) and have had a beneficial interest in certain assets or investments in Guernsey, defined in the MoU as "relevant property".  This is so that those clients are made aware of the disclosure facility before 31 December 2013 and to remind them about the availability of the disclosure facility during the period 6 months before the disclosure facility ends on 30 September 2016.  There is no obligation on the relevant persons contacted by financial intermediaries to participate in the disclosure facility. 

We have been monitoring developments in this field and have issued client bulletins on the rapidly changing landscape of exchange of information in the field of tax compliance.  We should be pleased to assist clients with the process of identifying and contacting relevant persons in order to meet the obligations on financial intermediaries set out in the MoU. 

Further Reading

Carey Olsen client note on FATCA-based reporting and IGAs for Guernsey

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