Time to declare offshore income warns HMRC
Sep 07, 2018
HMRC is urging UK taxpayers to come forward and declare any offshore income or profits on foreign assets before 30 September 2018, to avoid higher tax penalties.
New legislation called ‘Requirement to Correct’ requires UK taxpayers to notify HMRC about any offshore tax liabilities relating to UK income tax, capital gains tax, or inheritance tax.
Some UK taxpayers may not realise they have a requirement to declare their overseas financial interests. Under the rules, actions like renting out a property abroad, transferring income and assets from one country to another, or even renting out a UK property when living abroad, could mean taxpayers face a tax bill in the UK.
Common Reporting Standard
From 1 October 2018 more than 100 countries, including the UK, will be able to exchange data on financial accounts under the Common Reporting Standard (CRS). CRS data will significantly enhance HMRC’s ability to detect offshore income non-compliance, and it is in taxpayers’ interests to correct any non-compliance before that data is received or be faced with higher penalties.
The most common reasons for declaring offshore tax liabilities are in relation to either foreign property, investment income or moving money into the UK from abroad. Over 17,000 people have already contacted HMRC to notify them about tax due from sources of foreign income, such as their holiday homes and overseas properties.
How do I notify HMRC about offshore income?
Taxpayers can correct their tax liabilities by using HMRC’s digital disclosure service as part of the Worldwide Disclosure Facility
Once the taxpayer has notified HMRC by 30 September of their intention to make a declaration, they will then have 90 days to make a full disclosure and pay any tax owed. We can assist you in making the necessary disclosure and tax calculation if these new rules apply to you, so please do get in touch you’d like any help.