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UK, Crown Dependencies Revise Double Tax Pacts

by Jason Gorringe, Lowtax.net, London
17 March, 2016

Guernsey, Jersey, and the Isle of Man – collectively, the UK's Crown Dependencies – have agreed to revise their bilateral double tax agreements with the United Kingdom to close a potential tax loophole for property developers.

Jersey and Guernsey said the revisions remove a potential loophole that may have allowed non-UK resident property developers to avoid income tax or corporation tax in the UK in certain circumstances. They are effective from March 16, 2016.

The Guernsey and Jersey government said the agreement of these protocols demonstrates the UK's and the respective islands' joint commitment to working together to counter tax avoidance and evasion.

Guernsey's Treasury & Resources Minister, Gavin St Pier, said: "We have always maintained that it is for the UK to make its own tax system as robust as possible - but where it falls to us to assist them in that, then we will."

"In agreeing to this amendment to the existing DTA with the UK, we have done so in accord with our long-standing policy of partnership with the HM Treasury and HM Revenue & Customs to prevent the use of Guernsey for aggressive tax avoidance, tax fraud, and tax evasion."

"The amendment incorporates into the existing DTA wording that is in the OECD's Model DTA, and which we would expect to be in any new DTA that emerges from the renegotiation of our existing DTA, shortly to commence."

"This step is also consistent with the OECD BEPS principles, to which Guernsey has previously indicated that it is generally committed."

Jersey's Minister for External Relations, Philip Bailhache, said: "In agreeing to this amendment to the existing Double Taxation Arrangement with the UK, we have done so in accord with our longstanding policy of cooperating with the UK to limit the use of Jersey to evade UK tax or engage in abusive tax avoidance."

The Minister added: "The need for the amendment in respect of a tax measure in the UK Budget, which has general application to non-UK property developers, arose because of the historic wording of the existing Arrangement which was entered into in 1952.

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