If you are living overseas but are still ta resident in the UK, expect a letter is in the post from your tax adviser or bank.
The letter is a gentle nudge to remind British expats to declare any overseas savings or investments to HM Revenue and Customs (HMRC).
Anyone who receives the letter needs to check their tax filings are up to date.
If all overseas interest and income has been declared, then expats have nothing to do but to carry on keeping HMRC in the loop.
But if expats have undeclared income or assets overseas, then they should discuss making a tax filing with their advisers.
Tax network
The risk is HMRC will already know the full details of any overseas accounts – or will shortly find out as a tax information sharing network between more than 100 countries gets up to speed.
The first exchanges under the common reporting standard (CRS) have already taken place between HMRC and other tax authorities.
The tax net covers any UK tax resident with overseas cash or assets, specifically:
- Anyone who has had advice about overseas tax or investments
- Expats who have offshore accounts or investments
- Expats with more than $1 million offshore – which is about £600,000
- Anyone who has taxable income from outside the UK from investments, work or property
Expats with undeclared income can tell HMRC about tax that should have been paid through the Worldwide Disclosure Facility.
Non-disclosure penalties
Using the WDF means informing HMRC that tax is owed and agreeing to make the payment within 90 days.
Signing up for WDF does not necessarily mean receiving a discount on current penalties, but HMRC is threatening to impose much higher charges and interest on expats who continue to avoid paying tax.
Financial Secretary to the Treasury, Jane Ellison, said: “Every penny of tax that people evade deprives our public services of essential funding and we are focused on collecting all tax that is due.
“We are receiving data on the offshore finances of UK taxpayers. This is a game-changer in the fight against evasion and it’s time for anyone who is evading tax to do the right thing and pay what they owe.”
