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May 29, 2013

Jersey & Guernsey Disclosure Facilities : Initial Thoughts

The UK Government has signed a memorandum of understanding with Jersey and Guernsey in relation to co-operation with tax matters.

The Jersey Disclosure Facility (JDF) and the Guernsey Disclosure Facility (GDF) were signed in March 2013 and they follow hot on the heels of the Manx Disclosure Facility (MDF), which was signed with the Isle of Man Administration on 19 February 2013.

A comparison of the JDF and GDF with the Isle of Man Facility reveals that the terms of all three facilities are the same. Please read our analysis of the Isle of Man Disclosure Facility also on this blog for more detail on the terms http://pdtaxconsultants.wordpress.com/2013/05/02/the-isle-of-man-manx-disclosure-facility-initial-thoughts/.

The key for the UK government is that the deals for the three facilities all allow for an information sharing operation from 2016. Thus Financial Intermediaries of the three territories will be required to provide the UK government with details regarding financial assets that UK residents hold there from 2016 on an automatic basis.

Every taxpayer’s situation has differing facts and will need to take specific advice. However, initial views are that the Liechtenstein Disclosure Facility (LDF) provides better terms in general; for the following reasons:-

- The LDF offers guaranteed immunity from criminal prosecution; the JDF, GDF and MDF do not

- Money can be moved to Liechtenstein at any point up to 5 April 2016 in order to benefit from its terms; assets must be moved to Jersey, Guernsey or the Isle of Man much sooner (ie prior to 31 December 2013) in order to benefit from these facilities

- The LDF, GDF and MDF require payments on account up front of tax liabilities as part of the process. The LDF does not demand such a payment on account.

Notification has already been given by the UK Government of deals with other further flung territories and we will report back on these in due course.


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