Cayman Islands warn of HIRE Act Implications
It will be necessary for United States’ citizens living and working in the Cayman Islands to familiarize themselves with a new legislation as it affects their tax obligations. The legal changes apply to everyone who lives in the Cayman Islands with US citizenship.
According to the Hiring Incentives to Restore Employment Act of 2010 (HIRE act) that was passed by the US Congress in March 2010, new reporting obligations are imposed on US taxpayers in connection with non-US accounts and investments. The legislation will affect US passport holders in Cayman. Also, in accordance with the new legislation, the US tax authority, the Internal Revenue Service, is provided with tools for finding and prosecution of US individuals hiding assets overseas.
Also, the ability of non-US investors to access US markets is limited by the new rules. The legislation limits the ability of non-US investors to access the US markets via derivatives, loan notes and other synthetic arrangements. It will affect the US taxpayers having homes, artwork, planes, yachts and other personal use property held in non-US trust structures.