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
Related Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions