BVI gives UK non-doms four more months to opt out of automatic reporting
The British Virgin Islands (BVI) has allowed UK non-doms an additional four months to notify their intention to elect for the UK's Alternative Reporting Regime (ARR).
In November 2013 the BVI signed an agreement with the UK government under which BVI financial institutions would begin reporting all accounts owned by UK tax residents to HM Revenue & Customs, starting with the 2014-15 UK tax year. Similar agreements were signed by other British Overseas Territories and Crown Dependencies.
These agreements included a concession that non-domiciled UK residents could ask offshore banks and trusts not to disclose distributions that were not remitted to the UK. The BVI set a deadline of 31 May 2015 for non-doms and their banks or trustees to make this election for the ARR. The institutions would in turn have to notify the election to the BVI International Tax Authority.
Some BVI financial institutions chose not to offer the ARR election facility to their clients. Others have failed to meet the deadline. The BVI has now granted them more time to comply.
Last week, Finance Minister Orlando Smith made an order giving financial institutions until 30 September to submit an ARR election to the BVI International Tax Authority. Non-doms themselves have until 28 September to notify their intention to elect for ARR, unless the financial institution concerned demands the election by an earlier date. The order will be published in the next issue of the Virgin Islands Official Gazette.
'Financial institutions with reportable financial accounts that comply with these revised deadlines will not attract any enforcement actions', said the BVI finance ministry.
The concession, it said, is intended to allow institutions to complete their customer due diligence and comply with the inter-governmental agreements.
The ministry added that its 'relaxed approach' only applies for the year 2015. However, in any case the ARR regime is expected to expire next year, when the UK will move instead to the OECD's Common Reporting Standard for automatic information exchange, which does not include a non-dom opt-out. All distributions will then have to be disclosed, whether remitted to the UK or not.
The content displayed here is subject to our disclaimer. Read more