Chancellor George Osborne made the following announcement to MPs on 5 November 2013.
"Today, I can […] announce another step in the fight against tax evasion. We will be signing this afternoon a tax information sharing agreement with the Cayman Islands – the first ever with an overseas territory.
"And as a result, information of UK taxpayers held in the Cayman Islands will be automatically provided to HMRC, who will use it to collect the tax that is due," Mr Osborne said.
The Cayman Islands and other British overseas territories have become major international financial centres thanks to low taxation, light-touch regulation and limited requirements for those who invest to make any formal disclosure to the UK tax authorities.
This, it would appear, is about to change.
A Government press release confirms:
An important step towards the new global standard to be agreed early next year, financial information on UK taxpayers with accounts in the Cayman Islands will now be automatically provided to HM Revenue & Customs.
This will help HMRC to ensure that the correct amount of tax is being paid by those with money in Cayman Islands accounts and increase HMRC’s ability to clamp down on tax evasion.
The announcement follows the agreements signed between the UK and the Crown Dependencies of the Isle of Man, Jersey and Guernsey in October.
The Cayman Islands have also agreed to be part of the G5 multi-lateral information sharing pilot. Initially agreed between the UK, France, Germany, Italy and Spain, the Cayman Islands will join these countries in automatically exchanging information about bank accounts held by taxpayers from their jurisdictions.
In total, 31 jurisdictions have now joined the initiative.
Chancellor of the Exchequer, George Osborne, said:
“The UK has led the way in creating a new global standard for tax transparency and automatic tax information sharing. This was at the heart of our G8 agenda this year and today’s agreement builds on the progress we have already made.
We welcome this signing with the Cayman Islands, the first Overseas Territory to sign this type of agreement with the UK. This demonstrates our shared commitment to tackling tax evasion.
Alongside the significant investment that the government has made in HMRC’s anti-avoidance and evasion work, these agreements will help them to clamp down further on those individuals who seek to hide their assets offshore.
Our message is very clear: it is only fair that people pay the tax they owe. If you are trying to evade tax, we are coming after you.”