Last November I helped expose the fact that the UK was demanding that the Crown Dependencies grant it full automatic information exchange as a condition of agreeing to each of the Isle of Man, Jersey and Guernsey entering into deals with the USA on the Foreign Accountants Tax Compliance Act (FATCA).
The Isle of Man has now agreed to the UK's demands. Jersey and Guernsey have said now, which gave rise to the follwoing question and answer being asked in the States of Jersey yesterday:
Three things are obvious. When the UK threatened it did so knowing it could. Jersey has no negotiating position in response. And therefore further change in their position seems very likely. All of which can only be described as good news.
The real issue of course is whether or not larger European countries such as France and Germany will sign up to FATCA. If not FATCA could be completely dead in the water. The proposed FATCA agreements are not really that reciprocal. The US will not be required to identify beneficial ownership of its own corporations while FATCA “partners” will. As everyone knows hardcore tax evasion takes place through entities. From the perspective of France and Germany that probably do have residents hiding money in the US this is a real issue and one that is left unresolved nor is the US actually signing up to the EU STD. (Yes France and Germany signed a joint statement with the US but lets actually see a signed deal)
I personally think the UK signed up to FATCA for two reasons. One is to be able to impose this Son of FATCA legislation on the crown dependencies and overseas territorries. Two was to negate the idea that the mainland UK itself was becoming a tax haven something that I still think is a very real concern.
They’ll sign