As from 2009, the Finance Act 2008 authorised HMRC to issue information notices requiring UK financial institutions to provide HMRC with certain information and documentation, within their 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 where the money or assets relevant to the account are held outside of England, Wales, Scotland and Northern Ireland.
Information held by offshore subsidiaries or branches
If a UK financial institution receives a notice and has a subsidiary or maintains a branch in the Channel Islands, its response to HMRC depends on the particular factual position applying to that institution. However, the UK financial institution should always keep in mind its duty of confidentiality owed to its customers and any data protection issues under local laws. The financial institutional should consider the following points as a minimum:
- The legal structure of its Channel Island business;
- 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 content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.