Isle of Man Disclosure Facility
the information exchange agreement between the UK government and the government of the Isle of Man is expected to take effect beginning in January 2014. In line with the exchange of information agreement, a special disclosure opportunity for UK taxpayers will also be available known as the Manx Disclosure Facility (MDF), which is expected to run from 6 April 2013 to September 2016.
The exchange of information agreement will mean that Isle of Man financial institutions will be required to provide HMRC with details of financial information for UK taxpayers. Isle of Man Financial intermediaries will be required to notify their clients of the MDF before 31 December 2013.
Key features of the MDF:
Expected to run from 6 April 2013 to September 2016.
Targeted at individuals who already hold or have an interest in an IoM asset in the period commencing 6 April 1999 up to 31 December 2013. An interest in an asset can include a bank account, annuity, trust, company or partnership.
The individual must have been resident in the UK at some point between 6 April 1999 and 31 December 2013.
Anyone affected by the UK Swiss tax agreement, or who has been previously under investigation by HMRC will not be eligible to participate.
Undeclared tax liabilities arising from April 1999 (pre April 1999 will not be subject to tax) will need to be disclosed.
A 10% penalty rate is guaranteed for tax liabilities for periods up to April 2009, and 20% thereafter.
HMRC will provide a bespoke service so that discussions under a “no names” basis can be had prior to participating.
The UK Government has signed agreements with the US
so far and are in discussions with Jersey and Guernsey to further enhance automatic information exchange as part of their commitment to international tax compliance.