Exchange of information and voluntary disclosure
Information is relevant on the moment of publication (January 2016)
We are now at the start of an era where unprecedented levels of information will be supplied to HMRC in respect of UK residents who have overseas interests. This will have a major impact on UK tax resident non domiciled individuals.
From 2016 58 counties have signed up to automatically exchange information about assets and income to other relevant authorities such as HMRC and from 2017 a further 35 countries will join the club.
This will impact on: -
The following will be exchanged automatically: -
There are special rules for UK resident non domiciled individuals, which the offshore institution may follow if it so choses, if they chose to go down this route both the institution and the individual need to elect for it to apply. The first report will made to HMRC by 30 September 2016 covering the period 30 June 2014 to 5 April 2015.
Under this arrangement only the following is disclosed: -
When they receive the information HMRC are likely to put the onus on the tax payer by asking them to conform that they have declared all the relevant information on their tax returns and that their UK affairs are in order both currently and historically. They will then decide what action to take based on the amount of risk they assess to the reply. In some cases an investigation with be started immediately. If this is the case you need to be prepared to respond.
Some common area’s they have looked at to date include: -
As a result now would be a good time to review your affairs in detail to make sure you are ready for these disclosures. Currently there are arrangements in place where a voluntary disclosure can be made to HMRC and favourable terms will be applied to the settlement, if you do not act and HMRC obtain this information you would face more severe penalties and maybe even prosecution.
The following action should be considered:
As regards how to declare such information to HMRC there are various agreements currently in place the main one being the Liechtenstein agreement which expires in 2016, under this agreement you can make disclosures with certain assurances and benefits. The main benefit is you will not be prosecuted but in addition the number of years they can go back and look at is limited as is the penalty they can charge and the use of a composite rate of tax is applied to the disclosure.
If you feel you may have an issue relating to this matter or you would just like us to go over your affairs in detail to obtain peace of mind, please do not hesitate to contact us and we can then prepare a personal detailed action plan.
Services we offer
We are pleased to able to offer the following taxation based services: -
All taxation services are arranged on a fixed fee basis with the fee to be charged agreed in advance of any work being undertaken.
For all questions regarding your business in the UK and tax planning, please contact our Business Consultancy team at Law Firm Limited on +44 (0)20 7907 1460 or via email