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Cayman Islands tax haven signs up to UK Son of FATCA
| Published: | 7 Nov at 6 PM |
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As options for British expat investors shrink further by the day, the latest offshore haven to sign up for the UK’s ‘Son of FATCA’ is the Cayman Islands.
The offshore islands join the Isle of Man, Guernsey and Jersey in agreeing to share information with the Inland Revenue about British taxpayers’ financial affairs, including earnings, assets and account details. The British Virgin Islands and Gibraltar are likely to be the next to fall as negotiations are already under way.
As with many unpopular schemes emerging from the USA these days, FATCA is stoking a sea change in its sector in the name of cracking down on international tax avoidance. Many non-US citizens and expat investors may not realise that, if they hold assets in the US, their details will be reported to their home countries’ tax authorities.
For most offshore financial centres, the US government’s threat of being locked out of the US money markets isn’t worth thinking about, hence the rush to sign up with the UK’s version of the new law as well as to FATCA. Given the fact that US expats are taxed on their earnings in their host countries, even the generous US retirement pension might not compensate in the long run, with US citizens already surrendering their passports in favour of more sympathetic regimes.
Meanwhile, for UK expat retirees, the QROPs chaos continues with two more countries now removed from the approvals list without any explanation by HM Revenue and Customs. Two pensions, one from Bangladesh and the other from Malaysia, have been suspended and even the two countries’ financial authorities have no idea about the reasons behind the suspensions or their removal from the HMRC list.
The offshore islands join the Isle of Man, Guernsey and Jersey in agreeing to share information with the Inland Revenue about British taxpayers’ financial affairs, including earnings, assets and account details. The British Virgin Islands and Gibraltar are likely to be the next to fall as negotiations are already under way.
As with many unpopular schemes emerging from the USA these days, FATCA is stoking a sea change in its sector in the name of cracking down on international tax avoidance. Many non-US citizens and expat investors may not realise that, if they hold assets in the US, their details will be reported to their home countries’ tax authorities.
For most offshore financial centres, the US government’s threat of being locked out of the US money markets isn’t worth thinking about, hence the rush to sign up with the UK’s version of the new law as well as to FATCA. Given the fact that US expats are taxed on their earnings in their host countries, even the generous US retirement pension might not compensate in the long run, with US citizens already surrendering their passports in favour of more sympathetic regimes.
Meanwhile, for UK expat retirees, the QROPs chaos continues with two more countries now removed from the approvals list without any explanation by HM Revenue and Customs. Two pensions, one from Bangladesh and the other from Malaysia, have been suspended and even the two countries’ financial authorities have no idea about the reasons behind the suspensions or their removal from the HMRC list.
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