Cayman Account Holders From UK Receive Warning Letters
by Mike Godfrey, Lowtax.net, New York
30 January, 2014
HM Revenue & Customs (HMRC) has distributed letters to Britons who are believed to hold bank accounts in the Cayman Islands, encouraging them to disclose any previously undeclared income and capital gains.
The Cayman Islands signed an intergovernmental agreement with the United Kingdom in November last year, paving the way for the automatic exchange of financial information about UK taxpayers who hold accounts in the British Overseas Territory.
UK residents are required to report details of assets held in the Cayman Islands by September 2016 and pay any tax owed to the HMRC along with a fine of 10-20 percent. Most of those who comply will avoid prosecution, but the HMRC does not guarantee such immunity.
A spokesman for HMRC said: "Those who have declared any offshore income and gains on their UK tax return have nothing to worry about but any one with undeclared offshore income and gains needs to come forward now to avoid punitive penalties and in the most serious of cases criminal investigation."
Sean Wakeman, tax investigations partner with Crowe Clark Whitehill, said that Britons with Cayman Islands accounts are being asked by the HMRC to make a disclosure for 20 years "under the government approved Liechtenstein Disclosure Facility, which would immediately limit any liabilities to 13 years, or even to six years in cases involving just carelessness."
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