The United Kingdom Revenue and Customs Authority (HMRC) has sent letters to individuals suspected to hold bank accounts in the Cayman Islands, encouraging them to declare any previously undisclosed income and capital gains.
The UK and the Cayman Islands have signed a tax information exchange agreement, which makes it easier for the UK authorities to track any tax evasion attempts. Subject to the terms of the Agreement, the Cayman Islands will automatically disclose Financial information on UK taxpayers every year to the HMRC.
UK residents with assets concealed on the island will have until September 2016 to disclose details to the taxman and pay any tax owed to HMRC, as well as a fine between 10 per cent and 20 per cent.
Crowe Clark Whitehill tax investigations partner Sean Wakeman said:
"This New Year resolution by HMRC shows it is extending its reach beyond the low hanging fruit of Liechtenstein and Switzerland, and going global. This could be the start of a modern day crusade, attacking the missing billions from the chancellor's coffers.
"Account holders are invited to make a disclosure for 20 years which presupposes deliberate behaviour in evading tax. Anyone who may have underpaid taxes should strongly consider making a tax disclosure, with professional assistance, under the government approved Liechtenstein Disclosure Facility, which would immediately limit any liabilities to 13 years, or even to six years in cases involving just carelessness."
A spokesman for HMRC said:
"Those who have declared any offshore income and gains on their UK tax return have nothing to worry about but any one with undeclared offshore income and gains needs to come forward now to avoid punitive penalties and in the most serious of cases criminal investigation".