Do you have, or have you had any offshore income or assets?
If so you may be impacted by the new legislation brought in by HMRC, known as the ‘Requirement to Correct’. This legislation requires anyone with undeclared offshore tax liabilities to disclose these to HMRC by 30 September 2018.
Failure to do so will result in the most substantial HMRC penalties to date. These can range from 100% to 200% of the tax involved; plus penalties based on the value of any assets held or moved overseas.
Undeclared monies or assets
Any undeclared monies or assets held offshore which have not been taxed should be reviewed immediately. This legislation also brings in a new HMRC approach to penalties. Consequently, this means that advice given by a professional adviser regarding offshore matters may be classed as ‘disqualified’. Which means that you have no reasonable excuse for not declaring the tax on your offshore funds.
So if you were advised to structure your offshore assets and funds in a certain way, so that they were not taxable, but HMRC decide that they should be taxable, not only will you have to pay the tax but you will also have to pay the full penalty. HMRC deems that any advice you had regarding this, was provided by an interested party and therefore disqualifies you from having a reasonable excuse as to why this income was not declared.
Therefore to afford yourself the protection of having a reasonable excuse it is important that you get an independent review of any pre-existing professional advice regarding your offshore affairs.