On 19 February 2012 the UK signed an agreement with the Government of the Isle of Man which establishes a new disclosure facility. This will allow investors with accounts in the Isle of Man to come forward and settle outstanding UK tax liabilities.
This is being referred to as the “MDF”. Details are in the Memorandum of Understanding between HMRC and the Isle of Man. Further details will be available when HMRC publishes its expected guidance.
The key points of the Isle of Man disclosure opportunity are:
- The MDF begins on 6 April 2013 and runs until 30 September 2016.
- Anyone can use the MDF to make full disclosure of their UK tax arrears if (a) they have been UK-resident and (b) have property in the Isle of Man, at any time in the period 6 April 1999 to 31 December 2013. So those wishing to participate may be able to do so if they invest in the Isle of Man before the end of this year.
- Property in the Isle of Man is widely defined and includes bank accounts and insurance or annuity contracts, and also interests in companies, partnerships, trusts, etc.
- Anyone who has been the subject of an investigation by HMRC before 6 April 2013 cannot take part in the MDF. The definition of investigation is a very wide one.
- Anyone who participates in the MDF is required to make full disclosure of such details as HMRC may require.
- The taxpayer is required to pay their UK tax arrears at the same time as they apply to participate in the MDF – though if this causes problems they can make a time to pay proposal.
- The MDF does not provide guaranteed immunity from prosecution.
HMRC may amend or withdraw the disclosure facility upon giving three months in writing to the Government of the Isle of Man.