Jersey: Offshore Disclosure Facilities: Isle Of Man, Jersey And Guernsey

Last Updated: 15 April 2014
Article by Clive Barton

Individuals and companies with undeclared UK tax liabilities associated with assets held in the Isle of Man, Jersey and Guernsey can take advantage of disclosure facilities to regularise their tax affairs.

A window is now open for persons with undeclared UK tax liabilities to make full disclosure and settle unpaid tax following agreements signed between the UK government and the three Crown dependencies in February 2013.

The new agreements follow other arrangements such as the Liechtenstein Disclosure Facility (LDF) and UK/Swiss tax agreement.

What do the agreements with the Crown dependencies cover?

The agreements are the same in all key aspects, and each has two core elements.

1. An automatic information sharing agreement

This is intended to open up information flows from the Crown dependencies to HMRC, as part of HMRC's offshore evasion strategy. As a result, from early 2015 there will be a dramatic increase in the information provided by financial institutions in these offshore locations, increasing the likelihood that HMRC will catch UK residents who have been evading tax.

2. A disclosure facility

The disclosure facility enables individuals to regularise their tax affairs by declaring all unpaid UK taxes due. Key elements are as follows:

  • for each location, the disclosure facility will be available from 6 April 2013 until 30 September 2016;
  • the period covered by the disclosure need only start from 1 April 1999 – rather than going back 20 years as is usually the case;
  • penalties will in most cases be fixed at 10% for tax years up to 2008/09, and at 20% for 2009/10 onwards.

Who is eligible to use the disclosure facility?

An individual must have been UK tax resident in the UK at any point between 6 April 1999 and 31 December 2013.

Companies and other legal persons, such as trusts, must have been UK resident or incorporated in the UK between 1 April 1999 and 31 December 2013.

Individuals and companies must also have had a beneficial interest in relevant property (such as a bank account or trust assets) held in the relevant offshore location at any point in that period. Note that if an otherwise eligible individual or company does not have relevant property at present, they have until the end of 2013 to change that situation and so become able to take advantage of the disclosure facility.

How will potentially affected individuals be informed?

By the end of 2013, financial institutions on the islands must write to any of their customers who may be within the scope of the facility to alert them to the fact that:

  • information relating to their assets will be passed to HMRC; and
  • a disclosure facility is available if they are non-compliant with UK tax requirements.

The institutions must make contact again six months before the disclosure window closes.

Is everybody who receives a letter considered a tax evader?

No. There are many people, including non-domiciled UK resident individuals, who legally use Crown dependencies for their financial affairs. Financial institutions must nevertheless write to anyone who might be affected, although the disclosure facility is only aimed at those who need to regularise their past tax affairs.

Are some persons specifically excluded from taking part in the disclosure facility?


  • anyone under criminal investigation by HMRC on 6 April 2013;
  • anyone under 'in-depth investigation' by HMRC on 6 April 2013;
  • anyone linked to another disclosure facility such as the LDF or involved in the UK-Swiss tax agreement.

Why might using the disclosure facility be beneficial?

Firstly, because disclosure only needs to cover a period beginning from 1 April 1999, unpaid tax before that date is ignored. Secondly, the penalty rate is lower than would normally be the case. HMRC typically has the power to charge penalties up to 100% or in some cases even 200% of unpaid tax.

How does the disclosure process work?

Before any individual applies to join the disclosure facility, tax agents can discuss details of specific cases on a no-names basis with HMRC. Such discussions take place through a single point of contact at HMRC.

Assuming successful registration to the relevant disclosure facility, HMRC will then expect the disclosure to be made within six months, with full payment unless instalments terms are agreed.

The disclosure must include details of the full amount of duties payable to HMRC. The disclosure must include a declaration that it is correct and complete and provide a statement of assets and liabilities (including details of offshore accounts) as at April prior to the date of the disclosure.

Note that the disclosure cannot be limited to unpaid tax associated with the Isle of Man, Jersey or Guernsey; full disclosure of all unpaid taxes will be expected. Anyone who does not make such full disclosure could ultimately face criminal prosecution. HMRC can audit the disclosure, but will otherwise look to provide agreement within nine months.

Are the offshore disclosure facilities outlined above the best way to regularise a UK tax position?

Not necessarily. The LDF might be a better route because it includes some terms which are not available under the Crown Dependencies disclosure facilities. For example, the LDF offers a 'composite rate' option: instead of calculating the exact tax owed, all income is simply taxed at 40%. This could result in a lower total tax cost, if for example multiple duties apply to the same income.

How tough can HMRC get on offshore tax evaders?

HMRC has shown its willingness to pursue criminal prosecutions against tax evaders and at the date of the 2013 Budget there were 27 ongoing criminal investigations involving offshore evasion. Also, in February 2013, HMRC secured convictions against two UK company directors who had been using Isle of Man companies to evade UK tax. The prosecutions followed a tip-off from the German tax authorities, and resulted in prison sentences for the two directors.

If I am affected, what should I do?

Everyone with relevant assets in the Crown Dependencies should review their position. If you are uncertain as to the regularity of your UK tax affairs and your ability to benefit from one of the offshore disclosure facilities, seek professional advice as soon as possible.

Although the disclosure window is open until September 2016, don't forget that if HMRC begin an in depth investigation of your affairs, the disclosure facility may then not be available. You could then face tax, interest and penalties covering the last 20 years – and with the prospect of higher penalty rates of up to 200% of tax due.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.