|Final UK Offshore Disclosure Opportunity Extended by One Year|
The final opportunity for UK taxpayers to disclose offshore tax irregularities will run from April 2016 until September 2018, a year longer than previously anticipated.
It was announced in last March's budget that the existing offshore disclosure opportunities – the Liechtenstein Disclosure Facility (LDF) and Crown Dependencies Disclosure Facilities – will close at the end of this year. At the same time, HM Revenue & Customs will begin receiving routine reports of UK residents' overseas accounts from many jurisdictions, under the OECD Common Reporting Standard.
The new disclosure opportunity will open in April 2016, covering income tax, capital gains tax and inheritance tax. It will be much more restrictive than the existing ones. Moreover, it will also coincide with the introduction of stringent new civil penalties for offshore tax evasion, including a new penalty based on the value of the undeclared assets in the most serious cases. This penalty regime will be legislated in the 2016 Finance Bill, but commencement will be delayed to coincide with the new 'last-chance' disclosure regime.
Taxpayers now have only two weeks to take advantage of the LDF, which is the only facility to offer immunity from prosecution, says Paul Noble of law firm Pinsent Masons. It also places a definite limit on the number of years HM Revenue & Customs can look back on (although this window is not especially generous, going back to April 1999).
'With the number of criminal investigations continuing to rise, financial penalties are looking likely to become the lesser of two evils' for those who fall under the increased scrutiny of HMRC, commented Noble.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Dec.18, 2015