HMRC turns up the heat on offshore tax cheats

The new penalties will be slapped on offshore investors who evade tax by failing to tell HMRC about the full extent of their holdings.

HMRC says the rules will apply to anyone who does not reveal information about income or gains arising from:

  • Income from a source outside the UK
  • Assets held outside the UK
  • Financial transactions carried on outside the UK

The penalty rules apply to inaccuracies in tax returns or other documents relating to the tax year running from April 6, 2011 until April 5, 2012 or later filed with HMRC.

These tax returns are due for filing between now and January 31, 2013.

HMRC will charge a minimum 100% tax penalty for an inaccuracy in a return or document, a failure to notify a tax liability and the deliberate withholding of information where a tax return is more than 12 months late.

In territories which do not share information with HMRC, deliberate or concealed gains will be subject to a maximum 200% tax penalty.

The penalties will not apply to taxpayers filing information about their offshore finances under a disclosure agreement – like the current scheme involving investors with funds in Liechtenstein.

The rules apply to UK taxpayers and expats living overseas who are still classed as UK residents and cover income tax and capital gains tax.

A full list of penalties for offshore financial matters and how they are calculated can be downloaded from the HMRC web site www.hmrc.gov.uk/compliance/cc-fs17.pdf

The penalty warning follows the UK and Switzerland agreeing to settle a tax dispute over investments held by wealthy Britons with Swiss private banks.

The deal means the taxpayers must declare their income to HMRC or pay tax that covers past failures to reveal undeclared assets.

Stay Connected

Latest News

Difference Between Residence and Domicile

For British expats, their residence and domicile determine how much tax they are likely to pay, both in the country where they...

QROPS, Qualifying Recognised Overseas Pension Scheme

QROPS is a type of pensions that were designed to cater for the needs of British pension holders that move out of...

Where Do British Expats Live?

More than 5.5 million people from Britain live overseas and leave the country at a rate of around 2,000 a week.

Living In The Philippines, A Guide for Expats

Brilliant weather, a low cost of living and friendly, English speaking people makes The Philippines a popular destination for British expats.

LEAVE A REPLY

Please enter your comment!
Please enter your name here