Yes, I am getting rather excitable about this particular issue as it is a deadline that is now thundering down the hillside toward us.
It is also an area where a great many taxpayers will find themselves on the receiving end of a nasty HM Revenue & Customs enquiry into their affairs, and just like the Spanish Inquisition they won't be expecting it!
Much like the famous Monty Python sketch (but without the mirth) HMRC will be looking into the tax affairs of a great number of taxpayers who have done little wrong other than commit the greatest social crime of our time, owning property that is not situated in the UK! I jest I know, there are far more heinous crimes being perpetrated in the world, but with the attitude of the Treasury and HMRC you wouldn't think it. So, what's all the fuss about...
30 September 2018 – a vitally important date for all those who have, previously undisclosed offshore income and gains. This is the date by which taxpayers will have had to disclose income and gains and settled any tax liabilities arising.
So, why is this so important? – Because a number of new laws become effective from that date, not least of all the potential for penalties to double from 100 to 200% of the potential lost revenue where HMRC subsequently discover undisclosed income and gains, plus a potential further 10% of the value of the overseas assets held.
In addition, HMRC no longer has to prove there was an intention to defraud the exchequer when sending cases for criminal prosecution. Whilst it is tempting to rant about the inequity of such rules, its best to focus on not becoming subject to the higher penalty regime.
How will HMRC know about previously undisclosed assets? – From October 2017, the UK was an early adopter of the Common Reporting Standard between the UK and 90 other countries. This is essentially a financial information exchange mechanism so the chances are HMRC may already know about some assets. From 1 October 2018, approximately 127 countries will be exchanging information with the UK. It is expected that this information will feed into HMRC’s Connect system to be compared with entries on tax returns.
To summarise, the world is a smaller place from 1st October this year and the UK tax system has essentially declared war on all those who have failed to take advantage of previous offshore disclosure opportunities. This is the last chance to do so before HMRC effectively has the right to impose the most punitive civil penalty regime in the country’s modern history (on the bright side, at least there are no red hot pokers involved).
I urge you to speak to your tax adviser (or me if you'd prefer / don't have one - fees do apply of course 😉) as a matter of urgency to make sure you are not caught by the new legislation.
