HMRC is urging you to come forward and declare any foreign income or profits on offshore assets before 30 September, to avoid higher tax penalties. New legislation called ‘Requirement to Correct’ requires you, as a UK taxpayer, to notify HMRC, about any offshore tax liabilities relating to UK income tax, capital gains tax or inheritance tax.
It is a legal requirement
You may not realise you have a requirement to declare your 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 you could face a tax bill in the UK.
From 1 October, financial data will be exchanged internationally
From 1 October 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 non-compliance. It is in your interest, as a taxpayer, to correct any non-compliance, before that data is received or be faced with higher penalties.
Foreign Property, Investment, Income and Moving Money
The most common reasons for declaring offshore tax liabilities are in relation to foreign property, investment income and 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?
You can correct your tax liabilities by using HMRC’s digital disclosure service as part of the Worldwide Disclosure Facility. Once you have notified HMRC by 30 September of your intention to make a declaration, you 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.