This memorandum has been prepared for the assistance of our clients in connection with information notices issued by HM Revenue & Customs ("HMRC"). It is intended to provide only a summary and it is not intended to be comprehensive in scope. It is strongly recommended that you seek specific legal advice on such matters and we would be pleased to assist in this respect. A series of briefings on other specific aspects of Guernsey and Jersey law has been produced by Ogier and is available on our website www.ogier.com.
The memorandum has been prepared on the basis of the law and practice in Guernsey and Jersey as at 15 October 2009. Whilst it contains a summary of some of the provisions of the HMRC notices it does not purport to offer any English law advice.
On 12 August 2009 HMRC was authorised, pursuant to the Finance Act 2008, to issue information notices (each a "Notice") to a large number of UK financial institutions requiring delivery of certain information and documents to HMRC.
The Notice requires a recipient to produce certain information and documents, which are within its power or possession, relating to account holders who have an address within the United Kingdom and who hold a non- United Kingdom account. A non-United Kingdom account is an account (which term is defined to extend to accounts of any description however identified or marketed) where the money or assets relevant to the account are held outside of England, Wales, Scotland and Northern Ireland.
The Notice sets out certain restrictions as to its scope.
Information held by offshore subsidiaries or branches
To the extent that a financial institution that receives a Notice in the United Kingdom has a subsidiary or maintains a branch in the Channel Islands, consideration should be given as to how the institution responds in respect of customer information that is available to the local subsidiary or branch. Primarily the recipient of the notice and the Channel Islands subsidiary or branch will need to ensure that there is no breach of the duty of confidentiality owed to customers and that there is compliance with data protection legislation. How an institution responds to a Notice will depend on the particular factual position applying to that institution. Some points to consider will include:
- The legal structure which underpins the nature of the Channel Island business - including whether it is structured as a subsidiary or branch;
- The local rules as to confidentiality, how these apply in each case and how they are affected by any contractual arrangements made between the Channel Island entity and its customers;
- The extent to which the onshore financial institution has documents or information relating to customers of the subsidiary or branch available to it without the need to access the written records or computer network (and servers) which support the offshore business;
- What arrangements need to be made to secure compliance with the Data Protection (Bailiwick of Guernsey) Law, 2001 and the Data Protection (Jersey) Law, 2005 when dealing with Channel Island customer information;
- Whether, if an onshore institution already has de facto access to subsidiary or branch customer information, such information was delivered in breach of any duty of confidentiality and, if so, what might be done about that; and
- How any information which is available should best be collated.
The above series of consideration points it is not exhaustive. In essence each situation should be considered on its facts - a point HMRC themselves effectively impliedly acknowledge.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.