Posted by Nick Day on 09 May 2013
Individuals holding offshore assets over past years in Switzerland and Liechtenstein have various options for disclosing undeclared UK tax liabilities under either the UK/Swiss Tax Agreement or the Liechtenstein Disclosure Facility (LDF). Both these routes have proved lucrative for HM Revenue & Customs (HMRC), which has seen the UK Government extend similar provisions to those with undeclared income/gains in Guernsey, Jersey, and the Isle of Man.
All three of these “offshore havens” have recently agreed to an automatic exchange of information relating to investments held in the jurisdictions by UK residents, which in many respects will mirror the US FATCA (Foreign Account Tax Compliance Act) provisions implemented by the United States to gather information on its own taxpayers with investments hidden outside the States.
The facilities to disclose undeclared UK tax liabilities from these Crown Dependencies came into operation on 6 April 2013 and will be in place until September 2016. They in effect provide an “amnesty” and will enable UK taxpayers to settle the tax due and take advantage of a concessionary reduced penalty regime. From 1 October 2016 onwards, information on hidden assets in these jurisdictions will automatically be provided to HMRC, identifying all offshore account holders resident in the UK, who will face criminal prosecution and significant penalty charges.
The UK’s Exchequer Secretary, David Gauke, stated:
“The net is closing in on those seeking to hide their money offshore to evade their tax responsibilities. While the majority of people and businesses pay what they owe, this Government is determined to tackle the minority of tax evaders who don’t. The HMRC centre of excellence for tackling offshore tax evasion, which received additional funding in the Budget, is already bearing fruit. It is vital that everyone pays what they owe and that’s why we have made nearly a billion pounds available to HMRC to create a level tax playing field.”
If you hold assets in these locations that have not been disclosed to the UK taxman, Tax Innovations can help in every aspect of the voluntary disclosure process, including assessing the amount at stake and choosing the best route for you to take. It may be that after reviewing the position, no tax is due – for example, non-domiciled individuals residing in the UK who have not remitted offshore income/gains to the UK, may not be liable to pay any UK tax, depending on their circumstances.
If you would like any advice regarding the above article or would simply like to discuss other ways in which we could help you or your business, please contact us on 01962 856 990 or firstname.lastname@example.org
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