The UK
and the Cayman Islands have signed an
intergovernmental agreement to share information on British taxpayers as part
of the UK government's crackdown on overseas tax evasion.

Under the tax information exchange agreement, signed on
Tuesday, financial
information on UK taxpayers
with accounts held in the Cayman Islands will
now be automatically provided to HM Revenue and Customs.

Following the
commitment of all the overseas territories earlier this year to sign such
agreements, the Cayman Islands is the first overseas territory to formalise its
agreement with the UK.

In a statement,
the UK
finance minister George Osborne said that he welcomed the agreement.

"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," said Osborne.

"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,"
added Osborne.

The Cayman
Islands and other overseas territories have become major centres
for international finance through low tax and lighter touch regulation.
However, concerns over transparency in their banking systems have led to
accusations of tax evasion and a call
for tighter regulation.

The UK’s Crown
Dependencies and Overseas Territories have been under growing pressure from the
UK
government to start co-operating more closely with HMRC in order to root out
tax evaders.

Efforts to crack down on offshore
tax havens have also increased since the G8 Summit in June, when world leaders
agreed on coordinated action to combat tax
evasion and avoidance.

Cayman’s Premier Alden McLaughlin said the agreement showed
the islands' support for a single global
standard for financial information exchange.

"While the pace of dialogue has
quickened considerably in recent months, the acceptance of automatic exchange
as the most effective way to combat tax evasion is the result of decades of
global discussion regarding tax transparency. This approach also will minimise
operational costs for governments and business," said McLaughlin.

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 has 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.