Back in 2005 there was a lot of talk about the EU Savings Tax Directive’s implementation, and much was published about who would be affected, which nations were signing up to the Directive, and what it actually meant for expatriate and offshore savers. Since then however, expats could be forgiven for thinking the exchange of information agreement has basically gone away.
However, on the 1st of July this year, a seriously significant EU Savings Tax Directive (ESD) change comes into effect in the Channel Islands and the Isle of Man. If you’re an expatriate saver living anywhere within the EU and you have money saved in the likes of Jersey, Guernsey or the Isle of Man, you will be affected.
When the Directive came about a number of third party territories outside the EU agreed to be bound by the terms of it. The Channel Islands and the Isle of Man – which are outside the EU but which agreed to ESD – agreed to implement a withholding tax on the interest earned by those who had accounts locally, but who lived elsewhere within the EU. Well, as of July the 1st the withholding tax agreement ceases, and in its place comes the automatic disclosure and exchange of personal information between tax authorities.
If you’re resident anywhere within the EU and you have savings vehicles which accrue interest located in the Channel Islands or the Isle of Man you need to be aware that you are about to be affected by this very significant development.
The absolute and fundamental objective of the EU Savings Tax Directive was the disclosure of information between tax authorities, and as a result the EU has been chipping away at all nations which only agreed to a withholding tax instead. Finally the Isle of Man and the Channel Islands have given in to the pressure.
As a result, as of July the 1st affected savers will have personal information such as their name, address, date and place of birth and their tax identification number, together with the amount of interest they are earning, disclosed to their local tax authority.
If you have savings in the Isle of Man or the Channel Islands and you’re resident within the EU, you may now want to seek advice about how best to protect your personal identity and what should be your fundamental right to personal confidentiality.
Savers and those who are concerned they may be impacted are advised to seek professional, qualified and independent financial advice swiftly.