UK Crown dependencies Jersey, Guernsey and the Isle of Man, as well as the British Virgin Islands and the Cayman Islands, have met UK government officials to thrash out details for an enhanced exchange of information.

It follows reports that the UK is seeking to impose its own version of the US Foreign Account Tax Compliance Act (FATCA) on them.

Richard Murphy from Tax Research UK told The Telegraph: 'At the moment, information exchange agreements impact around 4% to 5% of total funds in Jersey. If this goes through, well over 90% of funds will be subject to information exchange.

'The demands are radical - they will look through companies to see who owns them; take investment trusts and see who are the beneficial owners; it won't just be about interest payments but detailed financial information.'

The Treasury wants UK dependencies to share details of the off-shore bank accounts and investment trusts in a bid to get tough on tax avoidance.

Geoff Cook, chief executive of Jersey Finance, said: 'It is well known that the principles behind the US FATCA arrangements are being looked at by the OECD, EU and UK. As part of that, we understand that the UK has approached the Crown dependencies, including Jersey, to discuss the possibility of applying the principles more widely to an exchange of information with the UK.

'It is right and proper that government officials from Jersey, along with their counterparts from Guernsey and the Isle of Man, should be meeting with Treasury to understand exactly what the UK has in mind and to present the position of the Crown dependencies in a coordinated way'.

Should the legislation be made law, it is expected to become effective on 1 January 2014.