The Isle of Man Disclosure Facility is a regime brought in to allow UK tax payers with undisclosed UK tax obligations to regularise their tax affairs. It will operate from 6 April 2013 until 30 September 2016. (note: closure has now been brought forward to 31 December 2015) see update here.
As Financial Intermediaries (FIs), we are required under the Memorandum of Understanding between the Isle of Man and the UK to contact to all of our clients who are UK tax payers to notify them about the Isle of Man Disclosure facility.
You can find detailed information about the arrangement on the HMRC website here. There is also a useful frequently asked questions document. The regime is relatively straightforward; it reduces penalties and in many cases forgives unpaid taxes prior to 1999.
This has been introduced because the Isle of Man and the UK have agreed to exchange information on an automatic basis in the future. See a copy of the press release here. This is known locally as UK FATCA, the details remain a little ‘hazy’ but in practice, but it is likely to mean that fiduciary service providers will be required to disclose beneficial ownership of Manx trusts and companies to the Isle of Man income tax department who will automatically pass details on to HMRC. Non domiciled UK residents will enjoy a ‘carve out’ under the rules.
These initiatives are moving very quickly now; last week Cayman, BVI, Anguilla and others agreed a pilot to exchange information – again automatically, with the G5 countries – Germany, France, UK, Spain and Italy.