BUT 30 SEPTEMBER DEADLINE LOOMS
WINTER IS COMING!
Requirement to Correct
Many people over the years of the world becoming smaller and more accessible may have acquired assets abroad. For example, immigrants and emigrants may have UK interests, but also ones in other countries, whether because of family, work or just acquiring (and perhaps disposing of) a holiday home.
Sometimes (it may sound odd) it seems, perhaps when lying on the patio of their newly upgraded Spanish villa, the owner may reach for an escapist novel (such as Banker’s Draft by RG Lennon https://www.amazon.co.uk/Bankers-Draft-R-G-Lennon-ebook/dp/B07CW4JC1J) instead of the latest Taxes Acts.
The Taxes Acts would of course warn the reader of the forthcoming deadline of 30 September 2018. This is to disclose any offshore liabilities (including say Capital Gains on the older villa used to help finance the new one) or the rent when you weren’t using it, or the sale of the home inherited from an uncle, or the apartment in Delhi where your Dad used to live and rental values have gone up so much it would be rude not to etc., etc.,
The world is small, families are dispersed; so are assets. Thanks to automatic sharing of financial information across Governments – permitted in most international double tax treaties, HMRC will receive bucket loads of data automatically. Modern computers will allow this to be analysed. No doubt HMRC will leap to conclusions and try to assess ‘evaded tax’.
Key points:
- Crucially, the time limit for assessment is planned to be extended to 12 years (going back from 4 years) which makes retaining records more important.
- There is to be a new criminal offence for ‘offshore evasion’, which means HMRC do not need to prove there was ‘deliberate intent’. This heightens the need for professional advice, because innocent ignorance is unlikely to amount to a successful defence.
- There will be new sanctions for ‘offshore evaders’ based on a penalty of up to 10% of the value of the underlying assets.
- Tougher sanctions come in for those who fail to disclose relevant offshore interests before 30 September 2018
IF IN DOUBT TAKE PROFESSIONAL ADVICE
Disguised Remuneration Schemes
Anyone involved or may have clients involved in what HMRC may consider to be caught in the new ‘disguised remuneration schemes’ should take independent advice soon, to ensure they can meet the deadline for any appropriate disclosure of 30 September 2018. It is now less than 2 months away.
Settlement terms are available for appropriate disclosure made before the deadline. After that date, HMRC are threatening more severe action.