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.