Requirement to Correct Offshore Tax Discrepancies

A new punitive offshore penalty regime now applies respect of tax liabilities arising from offshore tax matters.

Taxpayers have been given a final ‘opportunity’ to correct any errors for tax years 2016/17 and earlier before 30 September 2018.

This opportunity is the ‘Requirement to Correct’ (“RTC”) and any undisclosed offshore tax matters will face a standard eye-watering 200% penalty after that date. The penalty can be reduced to 100% in certain cases.

HMRCHer Majesty's Revenue and Customs (HM Revenue and Customs or HMRC) is a non-ministerial department of the UK Government responsible for the collection of taxes, the payment of some forms of state support and the administration of other regulatory regimes including the national minimum wage.... More have made it clear they will target taxpayers using information they receive from the many jurisdictions they have entered into tax information exchange agreements with under the Common Reporting Standards, which allow HMRC to obtain information from overseas financial institutions on an annual basis.

We strongly recommend that any taxpayer with income tax, CGTCapital Gains Tax ("CGT") applies in certain cases when an asset is sold for more than it was originally purchased.  The taxable gain (profit) may be triggered following the transfer of an asset, although commonly this would follow a sale.  A number of tax reliefs are available to exempt or reduce the tax that may apply.  Basic tax planning may... More and IHT liabilities involving offshore matters arising before 6 April 2017 (17 November 2017 for IHT) takes corrective action before 30 September.

Our team are experienced in making disclosures to HMRC and can assist you by assessing your circumstances to determine if corrective action is required, calculating undeclared taxes (if any) and choosing the right method to make the disclosure and correction to HMRC under the RTC rules.

Please contact Jamie Favell for further information and to discuss how we can assist you or your client.