Gibraltar-domiciled investment companies will now be able to sell products in the UK and also be able to share information with other EU states on the savings tax directive.
An agreement between the UK and Gibraltar Governments allows investment services firms in Gibraltar to market and sell their products and services in the UK. This is expected to come into effect by March 2006, once Gibraltar has passed the necessary legislation.
This will bring the island into line with Jersey, Guernsey and the Isle of Man with regard to the EU Savings Tax Directive.
Holders of savings accounts in Gibraltar will be able to choose between disclosing these accounts to the UK Revenue, or remaining anonymous and paying a withholding tax. The exchange of information and withholding tax agreement comes into force on the 1st April 2006, but there will be transitional arrangements that exempt income from existing fixed deposits and arrangements up to 1st April 2007.
Our view
This is good news for honest investors and will be perceived as not for those who have something to hide.