Jersey Signs a New Tax Agreement with the UK
The agreement enables the automatic exchange of information on a similar basis to the agreements the US has entered into with many jurisdictions. This reflects a major change in trend amongst democratic countries who now seek the automatic right to information about their residents/citizens with regard to financial accounts they have in other jurisdictions. In the past the governments have negotiated the exchange of information on the basis that information was exchanged only where a degree of proof existed that a person had not disclosed financial accounts in another jurisdiction.
The current era of austerity heralded by the events of 2008 and subsequent years has led governments in democratic countries to remove the “burden of proof” before information is exchanged and they now seek an automatic exchange of information. Improvements in technology have contributed to the international change of mood as technology “enables” data flows.
For clients who arrange their financial affairs in compliance with the tax laws there is nothing to fear from these provisions other than the fact their personal information will now flow through more systems than was previously the case. For many this will not be a concern but for others they will rightly question the security of their personal information which may lead to increased concerns about their personal safety.
So far the details have not yet been published but a memorandum of understand has been released and can be viewed here.