The UK has signed an automatic tax information sharing agreement with the Cayman Islands, following commitment from all overseas territories to formalise these arrangements.
In accordance with the agreement - which is in line with new global standards on sharing tax-related data between different countries - financial information on UK taxpayers with accounts in the Cayman Islands will now be automatically provided to HMRC.
This will help HMRC to ensure that the correct amount of tax is being paid by those with money in Cayman Islands accounts and increase HMRC's ability to clamp down on tax evasion.
The announcement follows the agreements signed between the UK and the Crown Dependencies of the Isle of Man, Jersey and Guernsey in October.
The Cayman Islands have also agreed to be part of the G5 multi-lateral information sharing pilot. Initially agreed between the UK, France, Germany, Italy and Spain, the Cayman Islands will join these countries in automatically exchanging information about bank accounts held by taxpayers from their jurisdictions.
In total, 31 jurisdictions have now joined the initiative.
Chancellor of the Exchequer, George Osborne, said that the UK has led the way in creating a new global standard for tax transparency and automatic tax information sharing.
'This was at the heart of our G8 agenda this year and today's agreement builds on the progress we have already made. We welcome this signing with the Cayman Islands, the first Overseas Territory to sign this type of agreement with the UK. This demonstrates our shared commitment to tackling tax evasion.
'Alongside the significant investment that the government has made in HMRC's anti-avoidance and evasion work, these agreements will help them to clamp down further on those individuals who seek to hide their assets offshore.
'Our message is very clear: it is only fair that people pay the tax they owe. If you are trying to evade tax, we are coming after you,' said Osborne.
The UK prioritised tax and transparency at the heart of the G8 agenda during its chairmanship in 2013. At the summit in July, leaders from the world's largest eight economies agreed on coordinated action to combat tax evasion and avoidance. This work is being taken forward by the OECD, as part of its Base Erosion and Profit Shifting (BEPS) workstream.
