UK-Jersey Inter-Governmental Agreement (IGA) – Press Summary

History and background

The UK-Jersey Agreement to Improve International Tax Compliance (the “IGA”) was signed on 22 October 2013, creating a reciprocal information reporting regime in respect of accounts held in one jurisdiction by a resident of the other. 

The IGA was conceived and agreed under the shadow of the Foreign Account Tax Compliance Act (“FATCA”), a piece of US legislation which requires similar information to be reported in respect of US citizens. It was felt that a similar agreement between the UK and the Crown Dependencies and British Overseas Territories would assist in the pursuit of any residents engaging in tax evasion.  

What information is reported?

Information is to be reported in respect of qualifying financial accounts (which are widely defined) maintained by a Jersey-based financial institution and held by one or more UK resident individuals or by entities with one or more UK resident controlling persons.

There are detailed provisions, criteria and thresholds which will determine whether a pre-existing or new financial account will qualify as reportable by the financial institution under the IGA.

What information will be reported?

Broadly paraphrased, the information reported under the standard reporting regime will include:

  • Name, address, date of birth and National Insurance Number of the specified person;
  • Account number (or equivalent);
  • Name and identifying number of the reporting financial institution;
  • Account balances, gross interest, gross dividends and gross amount of other income paid or credited during the year, as well as gross proceeds from sale or redemption of property.

Individuals who are ‘resident but not domiciled’ in the UK (“RNDs”)

An optional alternative reporting regime is available for UK RNDs who are taxed by the UK on a remittance basis.  Under this alternative regime, information is reported in respect of UK tax years and will include:

  • Name, address, date of birth and National Insurance Number of the RND;
  • Account number (or equivalent);
  • Name and identifying number of the reporting financial institution;
  • Any flows of gross interest and assets from the UK or from an 'unknown territory' into Jersey, and
  • Any flows of gross interest from Jersey into the UK or into an 'unknown territory'.

Timelines

No information is reportable for 2013.  The standard reporting regime requires information for the 2014 and 2015 calendar years to be reported by 30 September 2016, with reporting thereafter taking place within 9 months of the relevant calendar year end.

Under the alternative reporting regime, reporting will be required as from 30 June 2014.  Reporting is required by 30 September following the calendar year in which the UK tax year ends. i.e. 30 September 2016 for the UK tax year ending 5 April 2015.  Any RND individual who wishes to utilise the alternative reporting regime must elect to do so on an annual basis, by 28 February following the end of each UK tax year.

Jersey Disclosure Facility (“JDF”)

As part of the overall agreement to improve international tax compliance, a disclosure facility has been put in place allowing eligible individuals to disclose to HMRC the existence of accounts and other assets in Jersey and regularise their past tax affairs prior to information being automatically exchanged.  The eligibility criteria are set out in the JDF Memorandum of Understanding signed by Jersey and the UK on 13 March 2013.

The JDF runs from 6 April 2013 until 30 September 2016.  Under Regulations which came into force on 25 June 2013, all financial intermediaries in Jersey are obliged to contact relevant clients to make them aware of the JDF both before 31 December 2013 and again in the six months prior to the facility coming to an end on 30 September 2016.