Historically it was very difficult for HMRC to find out about offshore assets, income, gains and transfers which should have been declared in the UK, but for whatever reason, be it innocent or deliberate, were not reported.
International Tax Transparency, including the removal of banking secrecy rules, has led to the sharing of data across more than 100 jurisdictions, all of whom are fully committed to the detection of non-compliance, both here and overseas.
The UK is at the forefront of international efforts to bring greater transparency to offshore arrangements, even investing over £18M in other countries to improve their revenue effectiveness.
Targeting offshore non-compliance has already led to £2.9BN revenue receipts since 2010 and HMRC are, right now, processing unprecedented amounts of data provided to them by overseas countries – some of the headline numbers being:
- 5.67 Million bank individual account details
- 3 Million details connected to Offshore Financial Interests held by individuals
Tens of thousands of letters have recently been issued to taxpayers, who have been identified as having some connection to offshore income or assets, and as a result of these, as well as previous “nudge” letters, over 18,000 individuals have already notified HMRC of their intention to disclose and correct previous non reporting aspects.
In most cases these HMRC letters simply ask them to check and confirm their tax affairs are correct, but because of the complexities associated with some overseas sources, innocent errors can readily be made. Penalties for getting this wrong are severe - up to 200% of any revised tax due, plus interest for late payment, and so we would always recommend that professional advice is obtained before responding to any such communication.
We are here to help you – we are on your side – we have the experience and specialist global expertise to ensure your tax affairs are 100% correct – please do not hesitate to get in touch with Lynn Gracie, Private Client Tax Senior Manager (firstname.lastname@example.org) or your usual AAB contact.
By Lynn Gracie, Private Client Tax Senior Manager.
For more information on Lynn and the Private Client Tax team, click here.