H M Revenue and Customs (“HMRC“) has launched a new regime to encourage UK taxpayers to disclose undeclared offshore assets before 30 September 2018. This also applies to trustees of offshore trusts with UK tax liabilities. After this date, under the G20’s “Common Reporting Standard”, HMRC will receive information from its counterpart tax authorities in over 100 jurisdictions in respect of overseas assets held by UK residents.
The new disclosure regime (“the Requirement to Correct” – “RTC“) offers taxpayers the chance to correct any historic non-compliance for a reduced penalty. Heavy penalties will otherwise apply when the non-compliance is discovered.
Affected UK taxpayers and trustees of offshore trusts should review their tax affairs in advance of 30 September 2018 to check that there is nothing to declare. If they believe no UK tax is due in reliance on professional tax advice, it may be worthwhile double-checking that advice in some cases. Unfortunately, reliance on tax advice will not always prevent a penalty from being imposed if HMRC disagree with the professional’s view but there are some protective options you can consider.
Further information on the RTC is set out in Wedlake Bell’s bulletin. If you would like us to conduct a review to check that your, or your trust’s, UK tax affairs are up to date, please contact Camilla Wallace or your usual Wedlake Bell adviser.