Cayman Islands Tax Reforms. Tax investigations specialists have cautioned the UK taxpayers that in case they are holding undeclared assets in the Cayman Islands they will soon have to confront a very close examination regarding tax avoidance by HMRC (Her Majesty’s Revenue and Customs) which is a non-ministerial department of the UK Government responsible for the collection of taxes, the payment of some forms of state support, and the administration of other regulatory regimes including the national minimum wage.
The Revenue is trying to encourage the taxpayers for which the Revenue believes that have bank accounts in the Cayman Islands, by issuing letters to encourage them to reveal any undeclared assets, income, etc.
A warning is included saying that if the Revenue receives no answer from the bank account holders within a timeframe of 30 days, an even further thorough investigation will take place which could even end up to a criminal investigation.
With these letters the taxpayers/bank account holders are asked to reveal all undeclared assets for the last 20 years, which assumes intentional behavior regarding tax avoidance.
Sean Wakeman, partner at Crowe Clark Whitehill in tax investigations, suggested if a taxpayer with underpaid taxes has the option to choose to use the Liechtenstein revelation facility, limiting responsibilities up to 13 years or down to 6 years if the case is based on carelessness.
John Cassidy, colleague of Sean Wakeman said that although the Cayman Islands signed the automatic tax information sharing agreement with the UK and although the sent out letters were expected, perhaps the timing was about 12 months sooner than it was foreseen.