Bermuda's Minister of Finance this week, in a move welcomed by Bermuda's financial institutions, signed the UK Foreign Account Tax Compliance Act (FATCA) Intergovernmental Model 2 Agreement (IGA) with the United Kingdom.
The significance of choosing Model 2 IGA versus Model 1 means that the Bermuda Government will not be acting as the middleman for the purposes of the collection and transmission of information and data on UK residents to the UK Government.
As with any Model 1 IGA countries, Bermuda's financial institutions will gather the data to identify UK residents with interests in Bermuda and will instead automatically report this information directly to HM Treasury on an annual basis.
The signing of Model 2 IGA is in keeping with the Bermuda Government's commitment to international tax transparency and automatic exchange of information.
Bermuda is known as a market leader in insurance, reinsurance, banking and financial services with an established and well regulated infrastructure.
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This article first appeared in mondaq.com.