Crown Dependencies Disclosure Facilities

Out-Law Guide | 03 Oct 2013 | 12:25 pm | 3 min. read

This guide was last updated in March 2015. The disclosure facilities covered by this guide came to an end on 31 December 2015, so this information is for historical interest only.

In March 2013 HM Revenue & Customs (HMRC) announced agreements with each of the Crown Dependencies of Jersey, Guernsey and the Isle of Man. These agreements introduced new disclosure facilities which offered taxpayers the opportunity to resolve their tax position with HMRC on favourable terms for those with monies in one of the Crown Dependencies.

A Memorandum of Understanding (MOU) between the UK and each of the Crown Dependencies sets out the conditions for use of the disclosure facility and the special terms which apply to those who meet the eligibility criteria. A Tax Information Exchange Agreement between the UK and each of the Crown Dependencies forms part of the relevant agreement, allowing financial information in respect of UK taxpayers with accounts in those jurisdictions to be reported to HMRC each year. The Crown Dependencies Disclosure Facilities are open for registrations between 6 April 2013 and 31 December 2015. The facilities originally ran to September 2016, but it was announced in the 2015 Budget that they would be closed early. The Government has announced that a new time-limited facility, with tougher penalties and with no guarantee that criminal investigations will not be pursued, will be introduced in 2016


Financial intermediaries in each of the Crown Dependencies should have contacted any customers who may have a UK tax exposure to make them aware of the relevant disclosure facility before 31 December 2013 and should follow this up with a reminder in the six months before the facilities end.

Where a UK tax issue is identified the disclosure facilities are available to taxpayers (whether individuals, partnerships, trusts or companies) who:

  • were resident in the UK in the period from 6 April 1999 to 31 December 2013;
  • had a beneficial interest in a bank account, annuity, company trust or other entity based in one of the Crown Dependencies at some time between 6 April 1999 and 31 December 2013; and
  • who were not the subject of an enquiry or investigation by HMRC on 6 April 2013.

The agreements

Taxpayers can register for the disclosure facilities between 6 April 2013 and 31 December 2015. For those who meet the eligibility criteria taxes will be due for periods post 6 April 2009 as opposed to the statutory period of up to 20 years. The facilities cover all UK taxes including inheritance tax and national insurance contributions.

Eligible participants will also qualify for a fixed penalty of 10% of the tax due in relation to the years up to and including the year ended 5 April 2008 compared to the maximum penalty chargeable of 100% of the tax.  For years subsequent to the year ended 5 April 2009, penalties for eligible participants will still be substantially lower than allowed by statute but will be higher than in the earlier period. This reflects the fact that, since April 2011, where there is an offshore element to tax irregularities the maximum penalty that can be imposed is 200%, depending on the transparency of the country involved.

Even where a taxpayer has taken reasonable care in their tax affairs, mistakes can still happen. Where HMRC accepts that the taxpayer has made an innocent error, the disclosure period is limited to four years and penalties will not be charged although the full tax and interest for the four year period will be due.

The beneficial terms of the disclosure facilities are only available to those who have not been subject to an enquiry or investigation, who were not contacted by HMRC in respect of a previous disclosure facility, and who are not "relevant" persons for the purposes of the UK-Swiss Agreement.

UK compliant taxpayers

Those who live in the UK and have relevant assets in one of the Crown Dependencies will be notified by their financial intermediary even if they believe they are UK tax compliant. It is therefore important that taxpayers take the opportunity to check whether their UK tax affairs are fully up-to-date and accurate. The significant changes to the rules surrounding residence and domicile since 2008 are complex, and the changes may have affected either the need to file tax returns, or the basis on which they are filed.

Those involved in tax avoidance schemes may also need to ensure that the advice they have received is current and that HMRC agrees that the arrangement is effective.